Euro May Strengthen on Bigger Global Role, ECB’s Wunsch Says

azl(6v66b8]rrxc]{ibj7[vl_media_dl_1.png Source: ECBArticle content(Bloomberg) — The European Central Bank must prepare for a stronger euro if the continent wants to boost the single currency’s global status, Governing Council member Pierre Wunsch said.Sign In or Create an AccountEmail AddressContinueor View more offersArticle content“If we want a greater role for the euro, we might have a further appreciation,” the Belgian central-bank chief said in an interview in Brussels.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentIf there’s already concern about its recent ascent, “do you want at the same time a much greater international role for the euro? I’m not so sure,” he said.Article contentArticle contentEuropean officials are seeking to turn Donald Trump’s attacks on global trade and US institutions to their advantage by bolstering the standing of the euro zone’s currency, allowing the bloc to enjoy more of the privileges so far reserved for the dollar.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentSome, though, fret that this could lead to a stronger euro, hurting exporters and the economy. France urged an assessment of the risks as the region’s finance ministers met last month. ECB President Christine Lagarde has sought to downplay concerns.Article contentWhile saying there’s a link between the currency’s status and its exchange rate, Wunsch didn’t sound alarmed by the latest rally. Besides the fact that it’s approached $1.60 in the past, he highlighted that “we have to look at the effective exchange rate of the euro, not only with respect to the US, but with respect to the rest of the world.”Article contentSpeaking separately on France Inter radio on Thursday, his Governing Council member Francois Villeroy de Galhau highlighted that the war in Iran has changed the exchange rate situation.Article content“You may remember that just a few days ago, there were concerns about a dollar that was too weak and a euro that was too strong,” the French central bank chief said. “What we are seeing now is that this particular concern has at least been set aside, since the dollar has strengthened, regaining its safe-haven status.”Article contentArticle contentDiscussing interest rates, which have been on hold since last June, Wunsch said he doesn’t want to “make any bets” on what would could warrant a change any time soon. He reiterated that it’s too early to say how the conflict in the Middle East will affect the economy and monetary policy.Article contentStill, it’s “probably going to contribute to higher energy prices,” he said. “So if anything we might have to ask ourselves the question: What do we do if inflation goes up again?”Article contentWunsch cautioned against rushing more common financing for higher military spending in Europe, without excluding it.Article content“What is more important, though, than joint financing is that we consolidate the defense industry in Europe — and of course, we see it’s difficult,” he said.Article contentBut he added that “if we can politically find arrangements so that at least part of the financing would be European, why not?”Article content—With assistance from William Horobin, James Regan and Alexander Weber.Article content(Updates with Villeroy starting in seventh paragraph)Article contentTrending Bank of Canada governor warns of growing risks to financial stability Economy Posthaste: This dormant pipeline needs to be restarted for the sake of Canada, economists say News Legal fight over propane terminal clouds Canada's energy export push Energy US Sinking of Iranian Warship Piles Pressure on India's Modi PMN Business Housing affordability improves yet again, though not for the right reasons Real Estate Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Bank of Canada governor warns of growing risks to financial stability Economy Posthaste: This dormant pipeline needs to be restarted for the sake of Canada, economists say News Legal fight over propane terminal clouds Canada's energy export push Energy US Sinking of Iranian Warship Piles Pressure on India's Modi PMN Business Housing affordability improves yet again, though not for the right reasons Real Estate