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The minutes of the meeting also indicate that the "hawks" of the Board of Governors insisted on changing the ECB's rhetoric, saying that economic conditions make it possible to abandon the commitment to expand the quantitative easing program in case of a slowdown.
In late January, US Treasury Secretary Steven Mnuchin approved the weakening dollar as a positive factor for the US economy, although traditionally the country's authorities maintain a strong currency. Following these comments, the euro strengthened against the dollar to a maximum in more than three years.
At a press conference following the meeting of the Board of Governors, the head of the ECB said that such comments could violate the agreement on avoiding devaluation of the currency in order to improve competitiveness.
The ECB perceived Mnuchin's statement as a signal that the US could abandon its strong dollar policy and thereby harm the export of the Eurozone and reduce import prices. Later, US President Donald Trump confirmed his commitment to the policy of a strong dollar.
"Fears were... expressed about recent statements on the international arena on changes in the exchange rate and, more broadly, about the overall state of international relations," the protocol of the January meeting of the ECB reads. "They stressed the importance of adherence to the exchange rate agreement that excludes competitive devaluation. "
The euro's volatility was called "a source of uncertainty that requires monitoring."
At the meeting in January, the regulator again confirmed that it will make monthly purchases of assets of € 30 billion by the end of September 2018 "or longer, if necessary."
"If the outlook becomes less favorable or if the financial conditions become incompatible with further progress towards a sustainable correction of the inflation trajectory, the Governing Council is ready to increase the size and/or duration of the asset purchase program," the central bank reiterated its previous promise.
Meanwhile, the minutes showed differences of opinion regarding the rhetoric of the ECB.
"Some members spoke out in favor of excluding from the Governing Council's statement on the [QE program] the wording about the possibility of mitigation, which would be a tangible reflection of the strengthening of confidence in a sustained correction of the inflation trajectory," the protocol says. "The correction of [statements] is premature and is not justified by stronger confidence."
source: ft.com
In late January, US Treasury Secretary Steven Mnuchin approved the weakening dollar as a positive factor for the US economy, although traditionally the country's authorities maintain a strong currency. Following these comments, the euro strengthened against the dollar to a maximum in more than three years.
At a press conference following the meeting of the Board of Governors, the head of the ECB said that such comments could violate the agreement on avoiding devaluation of the currency in order to improve competitiveness.
The ECB perceived Mnuchin's statement as a signal that the US could abandon its strong dollar policy and thereby harm the export of the Eurozone and reduce import prices. Later, US President Donald Trump confirmed his commitment to the policy of a strong dollar.
"Fears were... expressed about recent statements on the international arena on changes in the exchange rate and, more broadly, about the overall state of international relations," the protocol of the January meeting of the ECB reads. "They stressed the importance of adherence to the exchange rate agreement that excludes competitive devaluation. "
The euro's volatility was called "a source of uncertainty that requires monitoring."
At the meeting in January, the regulator again confirmed that it will make monthly purchases of assets of € 30 billion by the end of September 2018 "or longer, if necessary."
"If the outlook becomes less favorable or if the financial conditions become incompatible with further progress towards a sustainable correction of the inflation trajectory, the Governing Council is ready to increase the size and/or duration of the asset purchase program," the central bank reiterated its previous promise.
Meanwhile, the minutes showed differences of opinion regarding the rhetoric of the ECB.
"Some members spoke out in favor of excluding from the Governing Council's statement on the [QE program] the wording about the possibility of mitigation, which would be a tangible reflection of the strengthening of confidence in a sustained correction of the inflation trajectory," the protocol says. "The correction of [statements] is premature and is not justified by stronger confidence."
source: ft.com
