"During the euro's run last year, there were a few times that ECB officials seem to try check the rise through commentary," BBH economists note.
Key quotes
On a trade-weighted basis, the euro has appreciated by more 1.85% from the middle of December through yesterday. If intervention is best conceived of as a ladder, the comments by the ECB are still the low rungs. The fact that among the most vocal hawks, Bundesbank President Weidmann is part of the chorus is interesting, and may be part of his attempt to re-make his image as the contest to replace Draghi next year will begin in earnest toward the middle of the year when Constancio's term ends. Spain's Finance Minister de Guindos seems to be the favorite.
If de Guindos does get the nod, then given the multi-dimension balance that needs to be struck, Draghi's successor may be from Germany. It would seem like it is Germany’s turn. The current term was ostensibly going to go to Germany's Weber before he resigned in disagreement with the majority of the ECB. Weidmann, who testified against the ECB before the European Court of Justice may be too divisive of a candidate. We have suggested that the ECB's chief economist, Praet, who was born in Germany, but carries a Belgian passport may be an interesting candidate who is seen as more of a consensus builder.
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