Article: ECB’s Draghi brushes off Trump charge of currency manipulation

Article - Media, Publications

ECB’s Draghi brushes off Trump charge of currency manipulation

News Desk, 19 June 2019

June 19: European Central Bank chief Mario Draghi said Tuesday that the institution “doesn’t target the exchange rate”, shrugging off an allegation of currency manipulation from US President Donald Trump.

“We have our remit. We have our mandate. Our mandate is price stability” or inflation just below two percent, Draghi told a central banking conference in Sintra, Portugal.

“We are ready to use all the instruments that are necessary to fulfil this mandate, and we don’t target the exchange rate,” he added.

Draghi’s statement that weak economic growth and sluggish inflation could prompt the ECB to slash further rates already at historic lows had earlier sparked Trump’s ire.

“Mario Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA,” Trump said on Twitter.

“They have been getting away with this for years, along with China and others,” he added.

Draghi said in a speech that “further cuts in policy interest rates… remain part of our tools” as the bank looks to juice growth and inflation.

Eurozone policymakers had already discussed potential rate cuts in early June, but Draghi’s latest remarks were the first to catch markets’ full attention.

That was in part because he said the central bank was ready to move “in the absence of improvement” rather than if economic conditions worsen, lowering the threshold for action.

But Trump later in the day continued to imply that the ECB was somehow looking to gain an advantage, rather than responding to economic conditions in the euro area.

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Article: Draghi brushes off Trump accusation of currency manipulation

Article - Media, Publications

Draghi brushes off Trump accusation of currency manipulation

EURACTIV, 19 June 2019

European Central Bank chief Mario Draghi said Tuesday (18 June) that the institution “doesn’t target the exchange rate”, shrugging off an allegation of currency manipulation from US President Donald Trump.

“We have our remit. We have our mandate. Our mandate is price stability” or inflation just below two percent, Draghi told a central banking conference in Sintra, Portugal.

“We are ready to use all the instruments that are necessary to fulfil this mandate, and we don’t target the exchange rate,” he added.

Draghi’s statement that weak economic growth and sluggish inflation could prompt the ECB to slash further rates already at historic lows had earlier sparked Trump’s ire.

“Mario Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA,” Trump said on Twitter.

“They have been getting away with this for years, along with China and others,” he added.
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Article: Forbes Flashback: How George Soros Broke The British Pound And Why Hedge Funds Probably Can’t Crack The Euro

Article - Media, Publications

Forbes Flashback: How George Soros Broke The British Pound And Why Hedge Funds Probably Can’t Crack The Euro

Forbes, 07 June 2015

Greek citizens voted against further austerity measures demanded by the Troika financing their rescue package, casting even more doubt on the country’s future as a member of the eurozone and throwing bond and currency markets into an uproar.

The euro has plunged from $1.20 to $1.09 this year (see chart). The feared unraveling of the currency – which, admittedly, would take a lot more than Greece’s departure – calls to mind another currency fiasco from the early 1990s, when George Soros and a group of other investors that included fellow hedge fund managers Paul Tudor Jones and Bruce Kovner, bet against a central bank’s ability to hold the line on its currency.

Forbes took a deep dive into that trade in the November 9, 1992 issue, illuminating how Soros made $1.5 billion in just a single month by betting the British pound and several other European currencies were priced too richly against the German deutsche mark.

The entire group cashed in big-time. Jones’ funds made $250 million, while Kovner’s Caxton Corp. rang the register to the tune of $300 million, but no one made more than Soros, who cleared $1.5 billion in that fateful month of September. (The score made Soros’ legend and swelled his firm’s coffers; assets under management jumped to $7 billion, from $3.3 billion, by mid-October 1992, and to $11 billion by the end of 1993.)

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