Economics
ECB Studying If Differences With Fed Policy Boosting Euro
- Dollar weakness despite stronger U.S. economy is a puzzle
- Euro jumped over past year, contributing to too-low inflation
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European Central Bank policy makers have agreed to look deeper into the euro’s appreciation against the dollar since the start of the pandemic, focusing on whether it’s driven by differences in stimulus policies compared with the U.S., according to officials familiar with the matter.
The review could shape how the ECB responds to an issue that has alarmed policy makers, who worry that the euro’s strength over the past year depresses inflation that is already below zero. That could force the central bank to provide more monetary stimulus, even as it acknowledges mounting risks to financial stability.