Markets are poised for ECB intervention
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.CURRENCY MARKETS are poised to see whether the European Central Bank (ECB) intervenes today to stem the fall of the euro, as Italy insisted it should not be made a scapegoat for the currency's troubles.
There was growing speculation at the weekend that the ECB would take advantage of holidays in the two biggest foreign exchange markets - a bank holiday in London and Labor Day in New York - to make its move.
The euro has fallen by 10.6 per cent against the dollar since it was introduced in January, and by 1.6 per cent last week alone. It was trading at $1.0430 on Friday, and many dealers are expecting it to hit parity this week.
Hans Tietmeyer, President of the Bundesbank and member of the ECB board, said last Friday he "would not be happy" if the euro were to decline further.
Mr Tietmeyer's designated successor, Ernst Welteke, said he did not think last week's decision by European finance ministers to allow Italy to book a higher deficit than stipulated by the euro stability pact should be repeated. "A precedent should not be made out of this... After all, public debt is a problem everywhere," Mr Welteke told Germany's Welt am Sonntag.
Giuliano Amato, the Italian Treasury Minister, said Italy was not to blame for the weak euro. "The mistake they make when they blame Italy for the weakness of the euro against the dollar is in confusing a let- up in financial rigour with a simple forecast of difficulties in the economic outlook," Mr Amato told Corriere della Sera in an interview published yesterday.
"Let's be clear on one point: there has been no let-up in financial rigour. Both spending and revenues are absolutely in line with forecasts," he said.
Mr Amato won a key concession when EU finance ministers agreed that, due to slow growth, Italy could overshoot the euro zone's 2 per cent budget deficit target this year.
Mr Welteke said the euro required "close monitoring", but he was convinced it would recover. He cautioned against highlighting the benefit a weaker euro has on exports while ignoring inflation risks. Central bank intervention was not viable in supporting a currency, he said.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments