ECB’s de Guindos: A Tariff War Could Take EUR/USD to Parity

19 December 2024

ECB’s de Guindos: A Tariff War Could Take EUR/USD to Parity
Luis De Guindos, vice president of the European Central Bank, at the ECB main building in Frankfurt am Main on May 15, 2024. Photo by © Maria Rita Quitadamo/ECB under CC BY-NC-ND 2.0.

By Marta Vilar – MADRID (Econostream) – European Central Bank Vice President Luis de Guindos said on Thursday that a trade war between Europe and the US could impact on the euro and even send it back to parity with the US dollar.

In an interview with Spanish radio Radio Nacional Española, de Guindos said that ‘a tariff war could lead to changes and volatility on the exchange rate, be it reaching parity on the EUR/USD’.

The ECB paid close attention to the evolution of the exchange rate but did not fix any targets for it, despite its importance, he said.

A trade war between Europe and the US ‘could have an impact on inflation and it is very negative for economic growth’, he said.

Europe should negotiate and manage this situation with the US with skilfulness, he said.

 

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