Can the ECB Talk Down The EUR?

The euro has taken a beating from comments by the European Central Bank that currency strength is a concern, but it will only stay down if action follows the tough talk, analysts say.

The euro tumbled over 1 percent from a 2–1/2 year high on Thursday after ECB chief Mario Draghi said the strengthening euro was a “cause for serious concern.” He suggested the central bank would ease monetary policy next month after holding its key rate steady at 0.25 percent in May.

In early Friday trade, the single currency hovered around $1.3835, holding near the lows hit the previous session.

“The reality is that unless the ECB actually follows through on its commitment to ease come June, the euro will stay where it is or potentially move higher,” Jacob Kirkegaard, a senior research fellow at the Peterson Institute for International Economics in Washington, told CNBC.

via CNBC

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