ECB Head Starts Term, Euro Keeps Steady
Christine Lagarde made her first speech as the European Central Bank President calling for strength, resolve, and courage. Despite expectations of her discussing monetary policy, Lagarde honored the previous ECB President as a former International Monetary Fund Chief.
According to Lagarde, Mario Draghi was a “formidable negotiator and a straight-talker with a forensic mind.” He was notorious for his intolerance for superficiality.
But praise was not her only intention; she also said last week there was not enough solidarity in the European Union. Germany is one of her key challenges, especially as the EU’s biggest economy.
If Germany invested more instead of running budget surpluses every year, Lagarde said economic growth would accelerate. She claimed rates could rise quicker, as well.
Germany has ongoing conflicts with the ECB. The former chief accused the central bank of hurting German investors by taking interest rates too low.
Lagarde said that she knows of different views in a “good solution,” like balancing between sharing and reducing risks.
Analysts claim investors will focus on the expected 0.1% rise of Eurozone’s PPI figure for September.
Other EU News as the Greenback Slides
The euro held steady as European countries emerged with separate news. Meanwhile, the greenback slumped against the yuan.
New Zealand announced the free trade agreement upgrade with China. The NZD/EUR pair inched up to €0.5760.
Hungarian National Bank Governor claimed the euro was a “strategic error.” Gov. Gyorgy Matolcsy said the most necessary pillars of a successful global currency were still missing.
Hungary insisted on keeping outside eurozone borders before the country can strengthen its economy. The HUF/EUR exchange slumped 0.35% at €0.003038.
The EUR/USD pair fell to $1.1140 when the Manufacturing PMI in October came in slightly higher than the previous estimates. Germany and the Eurozone helped the shared currency find demand.
Contrarily, the USD/CNY pair slid to ¥7.0153 today. Investors lost risk appetites at the Trump administration’s decision to withdraw from the Paris climate agreement.
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