Euro Goes Strong: Central Bank of Europe Has Nothing to Do, the Problem is from USD
Ex CEO of Europe Bank told CNBC last Friday that ECB is facing a serious problem. However, the problem is from the United States.
Euro keeps going strong. Recently Euro even rose over 1.20 USD level. This brought a problem to the future currency policies of Europe. The goal of ECB is to carry core inflation. However, strong Euro would interrupt the goal.
Ex ECB CEO Jean-Claude Trichet pointed out since the problem comes from the US, it makes ECB a serious problem. “There are many factors making Euro acted strong.” “The real economy in Europe highly rose increasing the attractive of Euro.” Said, Trichet. “The US fell into troubles especially the new investment and tax reforming policies.” “Stepping around without forwarding and Trump’s tax reforming policies is hard to promote are the factors as well.” “The reason Euro went strong is mostly about the weakness of USD,” Trichet told CNBC on an Italian forum Ambrosetti.
The Weakness of USD
FED has already started raising the interests to make the currency more normal. In addition, people expect the US government tends to reduce the tax and highly increase the expenses of infrastructure construction. The factors make the strong of USD.
However, investors have lost their faith in Trump’s abilities to promote the policies. At the meanwhile, the relationship between the US and North Korea is getting more nervous. The investors are seeking for the avoiding-risks assets including Euro. Therefore, the rate of Euro increased.
Since this year, USD to currency basket fell about 10%. On next Thursday, ECB will have a policy meeting. The investors expected the CEO will talk about the strong Euro. Moreover, they might discuss the currency policy trends in the future.