ECB minutes highlight policymakers' fears over currency wars

FRANKFURT, Germany -- The extent of European officials' concerns over the weakness of the dollar was laid bare on Thursday in a set of European Central Bank accounts that highlighted fears that the U.S. administration was deliberately trying to engage in currency wars.

The accounts of the ECB's January monetary policy vote also reveal that the governing council's hawks pushed for a change in the bank's communications, saying economic conditions were now strong enough to drop a commitment to boost the quantitative easing programme in the event of a slowdown.

Mario Draghi, ECB president, last month hit out at U.S. Treasury secretary Steven Mnuchin's claim that a weak dollar was good for the American economy, saying Washington needed to uphold the rules of the international monetary system, which forbid nations from deliberately devaluing their currencies.

The remarks were seen as a signal that the U.S. could ditch its strong dollar policy -- and in so doing damage euro exports and lower imported inflation. U.S. President Trump has since reaffirmed the strong dollar policy.

The accounts of the January ECB meeting, published today, show. Mr. Draghi's fears were widely shared among the bank's decision makers. "Concerns were ... expressed about recent statements in the international arena about exchange rate developments and, more broadly, the overall state of international relations," the account said. "The importance of adhering to agreed statements on the exchange rate was emphasised." Those agreements explicitly rule out competitive devaluations. ...

... For the remainder of the report:

https://www.ft.com/content/40eecbfa-17cc-11e8...76-4a6390addb44

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