ECB’s de Guindos: Hope Exchange Rate Stabilises and Does Not Have Further Negative Impact

9 July 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Vice President Luis de Guindos said on Wednesday that he hoped the euro would stabilise and that its strength would have no additional negative impact.

In a panel discussion at Cursos de Verano CEU-El Escorial in Madrid, de Guindos said that the ECB did not focus so much on the level of the exchange rate as on the speed with which it changed.

The ECB would monitor potential market overreactions stemming from the evolution of the exchange rate, he said.

‘It is important to have a closer look [at the exchange rate] without setting any particular reference level, but I hope it will stabilise to some extent, and it will not have an additional negative impact’, he said.

Risks to economic growth were tilted to the downside, he said.

Q1 GDP data for the Eurozone had been ‘very good’, though ‘distorted’ by Ireland’s GDP contribution and general trade-related front-loading, he said.

‘The level of uncertainty is very high, it is impacting consumption and investment decisions’, he said.

Not only is the US-EU trade deal significant, but the agreement between the US and China is also important, according to de Guindos, who said that trade diversion of cheap Chinese goods to Europe could have ‘an important indirect effect’.

Trade tensions could potentially lead to fragmentation over a longer-term horizon that was beyond what was currently reflected in the ECB’s projections, he said.

Such fragmentation would have ‘a clear negative impact for inflation in the longer term’, he said.