- Recent developments may well have a dampening impact on growth in the Euro Area.
- The Euro Area economy has proved fairly resilient to date, supported by a strong labour market.
- The use of the US dollar in international funding, payment and trade transactions, or as a reserve currency, will not be challenged in the short term.
- But the role of the Euro can gradually expand, especially if we deliver on “more Europe”.
- The ECB concern has shifted from inflation to slow growth.
Since last week’s rate cut, the ECB members have been making victory laps on inflation as they’ve been basically stating that they’ve achieved their price stability mandate and now they will focus on keeping inflation at target against the risk of undershooting it.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
