MNI BRIEF: Bundesbank Chief Not Worried By EUR-USD Strength

Recent euro appreciation against the US dollar has made both European and German exports somewhat less competitive, but its effects should not be overstated, Bundesbank president Joachim Nagel said in a speech on Monday in which he said he was “not concerned about the current valuation of the euro.”

The euro has appreciated by 12.5% against the US dollar since the beginning of the year, Nagel said, but its effective appreciation against a group of 18 partner currencies has been only 5.5% over the same period, and 6.2 against a further 41 partner currencies. 

“Simply looking at the euro's gains against the US dollar therefore exaggerates the extent to which the local export economy is being burdened,” he said, adding that the recent appreciation of the euro "has contributed to the price competitiveness of the German economy and the euro area no longer being favourable, but rather it is neutral."