Comments by newly appointed ECB member (and Bank of Finland governor) Olli Rehn
- Says that US exit from WTO would damage international order
- Says that the ECB is certainly not manipulating the euro
- Adds that China’s currency is weaker because of trade war threat
- Urges US to cease the trade war rhetoric
- Markets are reading the ECB rate guidance correctly
- ECB policy stance will stay expansionary
- It’s too early to discuss Draghi succession
Rehn is speaking in an interview with Bloomberg and is covering quite a number of issues here. I’m not sure why he felt the need to comment on the yuan but it feels more that he is irritated by accusations coming from Trump about the euro manipulating its currency. These were his exact words:
“We don’t usually comment on central banks other currencies but my reading of the Chinese yuan is that it has weakened mainly because of the trade war and not because of manipulation”.
He also reiterated that the market is on the right path in gauging the ECB’s timing of a rate hike. Currently, Q3 2019 to October is the timing that the market is looking at and there hasn’t been any hints or clues by the ECB that that would change.