ECB’s Coeure: Euro area needs a common fiscal instrument

The European Central Bank's Coeure has crossed the wires with statements made in a speech on 'The Single Currency: An Unfinished Agenda'.

Key notes

  • Would support monetary policy, prevent a procyclical tightening in bad times.
  • Would boost confidence in national automatic stabilisers, thereby protecting jobs and minimising output losses.
  • Growth remains cyclically too weak to fully restore fiscal space in countries where public debt is unacceptably high.

Full press release

FX implications

Nothing here to divert the attention away from expectations of further easing from the ECB and weakness in the euro on a longer-term outlook. However, the US dollar has taken a knock of late which is a supporting factor for the single currency. DXY meets critical support at 97.70 and has pierced the level to a low of 97.64. EUR/USD has subsequently extended the Dec rally from around 1.10 the figure to a fresh high of 1.1093 from 1.1066 lows on the day. 


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