The head of the European Union's monetary agency, Mario Draghi, said in Washington last week that the strengthening of the euro exchange rate would require further monetary policy accommodation. Huh? What did he just say?
He said what many have suspected—the ECB will use of interest-rate policy to manipulate currency exchange rates. Yes that's right; the euro zone is a currency manipulator and not ashamed to admit it!
Why would monetary agencies want to reduce the value of their currency? The answer lies in the attractiveness of exports to foreign buyers of goods produced in weak currency countries. The bottom line is these goods are more affordable and that means more sales which results in stronger economic numbers.