FX News: ECB’s Lautenschlaeger Resigns

Sabine Lautenschlaeger, a policy hawk from Germany, has resigned from the ECB. This comes as a result of the backlash against the European Central Bank’s stimulus measures.

The central bank did not provide any explanation for the resignation. It will, however, take effect at the end of October. This comes two years before the end of her term as one of the six-member Executive Board.

This Executive Board is responsible for running the central bank.

The resignation comes amid the sudden division at the upper echelon of the bank. A third of the policymakers has disagreed with the bank’s decision to resume bond purchases.

The bank restarted such a measure to give the eurozone’s inflation level a boost.

Other policymakers who dissented with the decision include Bundesbank President Jens Weidmann and Frace and Netherland governors.

ECB Divided, Other FX News

Over in Germany, policymakers feel frustrations over the central bank’s easy-money policy of negative rates.

A local newspaper even painted ECB President Mario Draghi as a vampire sucking Germany’s savings.

In 2011, something similar also took place. Juergen Stark, the bank’s chief economist at the time, resigned from his post due to conflict with the policy.

Elsewhere in the forex markets, the US dollar posted its largest daily gain in three months. This comes after US President Donald Trump suggested that an agreement might come sooner. Trump didn’t offer any specifics.

The British pound gained 0.2% to 1.2374 after it fell overnight. UK Attorney-General Geoffrey Cox said that a motion for a general election will come out in parliament soon.

Meanwhile, the Australian dollar climbed 0.2% against the greenback. The New Zealand dollar also rose 0.6%, coming after news of the RBNZ’s decision to keep rates steady.

Against the yen, the dollar lost 0.1%.