Euro Reverses Losses With Trichet Hawkishness In Focus

The euro rose Monday, reversing earlier losses as the anti-inflationary bias of European Central Bank President Jean-Claude Trichet fed expectations of higher euro zone interest rates, relegating concerns about European debt to the backburner.

Last week, the European Union summit adjourned without a resolution to the 17-nation currency bloc's sovereign debt woes. Coming as it did on the heels of Portugal's government being toppled by the failure of austerity measures, the euro came under selling pressure.

Europe's political environment has become increasingly inhospitable to broad-based reform. The developments prompted some analysts to question whether the mounting uncertainty would keep the ECB from raising borrowing costs to quell price pressures. At the same time, Federal Reserve officials have made increasingly hawkish noises that encouraged dollar buying.

But early Monday, Trichet reiterated his stance on raising rates, which lifted the euro out of its doldrums. In a market that remains fixated on higher-yields--the euro's primary source of strength--traders immediately bought back the single currency after sending it sharply lower.

For more: Euro Reverses Losses With Trichet Hawkishness In Focus - WSJ.com

Trichet: 'Irresponsible' EU States Must Tow the Line

European Central Bank President Jean-Claude Trichet Friday put more pressure on euro-zone governments, indicating that the ECB won't make up for any "irresponsible" action on their side.

"The European governments have to fulfill their duties in full," he said at an event organized by Germany's conservative CSU party in Wildbad Kreuth. Governments should rigorously implement their national adjustment programs and considerably reinforce their collective governance efforts, he said.
"Monetary policy responsibility cannot substitute for government irresponsibility," Mr. Trichet said. He repeated his call for a "quantum leap" in economic governance in the euro area, and called for "further significant progress" on the reduction of excessive fiscal deficits.

"Europe cannot afford to rest halfway—we need to be more ambitious," he said. "The proposals that we have seen in Brussels do not go far enough in the ECB's view," he reiterated.

For more: Trichet: 'Irresponsible' EU States Must Tow the Line - WSJ.com

ECB's Trichet to receive 2011 Charlemagne Prize - Forbes.com

The committee for a renowned German prize honoring contributions strengthening European unity says its 2011 award will go the head of the European Central Bank.

The Charlemagne Prize said Saturday that Jean-Claude Trichet will be awarded next year's award for his achievement of successfully steering Europe's monetary union through difficult times, defending the euro currency's stability and the continent's competitiveness.

For more: ECB's Trichet to receive 2011 Charlemagne Prize - Forbes.com

Strife Complicates ECB Succession

Jean-Claude Trichet gave a sharp twist to the fast-developing narrative on his succession over the weekend, publicly putting down the man most widely tipped to follow him as European Central Bank president.

Mr. Trichet's remarks were his first response to a call by German central bank head Axel Weber for an immediate end to the ECB's buying of euro-zone government bonds, a policy he said isn't only risky but ineffective. Mr. Weber's speech, delivered in New York, came only days after Mr. Trichet had told a press conference that the program would continue as long as necessary.

For more: Strife Complicates ECB Succession - WSJ.com

Trichet Says Euro Region Needs `More Ambitious' Rules to Keep Fiscal Rigor

European Central Bank President Jean-Claude Trichet called for “more ambitious” rules to force member countries to maintain fiscal discipline and punish those who don’t.

“For the euro area, more ambitious reforms are needed to ensure the smooth functioning of monetary union,” Trichet said in a speech at the World Policy Conference in Marrakech. There must be “greater automaticity, accelerated timelines and reduced room for discretion in procedures.”

European Union finance ministers meet in Luxembourg on Oct. 18 to consider European Commission proposals to fix budget management and avoid runaway deficits that led to Greece’s near- default this year. France is balking at calls for the faster imposition of sanctions on deficit-ridden governments, putting it at odds with Germany and the ECB over how to prevent a repeat of the debt crisis.

For more: Trichet Says Euro Region Needs `More Ambitious' Rules to Keep Fiscal Rigor - Bloomberg

Europe Economy Looks Towards a Brighter Forecast

The European economy is sighting towards a more optimistic future. According to Jean-Claude Trichet, President, European Central Bank the growth forecast in the European Union has been raised from a meager 1% to a 1.6%. Though, Mr. Trichet has further stated that there is a possibility of the growth to slow down by 2011 to 1.4%.

Goldman Sachs has though raised expectations by stating that possible growth in 2011 could be around 2.4% while for the current financial year it could possibly be around 1.7%.

For more: Europe Economy Looks Towards a Brighter Forecast | TopNews United Kingdom

Trichet Sees Reasons for Optimism in Europe

The president of the European Central Bank, Jean-Claude Trichet, offered a somewhat more optimistic assessment of the euro zone economy Thursday and said that bank stress tests in July were “an important step forward in restoring market confidence.”

Mr. Trichet made the comments after the European Central Bank, like the Bank of England earlier in the day, left its benchmark interest rate at a record low, Jack Ewing and Julia Werdigier report in The New York Times.
He said that he was not signaling plans by the European Central Bank to raise rates, and cautioned that growth was occurring in “an environment of uncertainty.”

For more: Trichet Sees Reasons for Optimism in Europe - DealBook Blog - NYTimes.com

ECB Keeps Rate at 1%, May Weigh Second Run at Exit

The European Central Bank left interest rates at a record low as policy makers start to consider how to scale back the crisis-fighting measures introduced over the past two years.

The ECB’s Governing Council meeting in Frankfurt today set the benchmark lending rate at 1 percent for a 16th month, as predicted by all 51 economists in a Bloomberg News survey. The ECB will not raise its key rate until the third quarter of 2011, a separate survey showed. President Jean-Claude Trichet holds a press conference at 2:30 p.m.

For more: ECB Keeps Rate at 1%, May Weigh Second Run at Exit - Bloomberg

EU Economy: Trichet Press Conference

President of the ECB Jean Claude Trichet in his press conference after holding the interest rate unchanged at 1.00% in June said the economy started to rebound from spring with the improvement in weather conditions. He predicts economic growth to be at a moderate pace over the medium term as balance sheet adjustments and high unemployment will affect the progress seen recently. 

Trichet raised the euro-area growth forecast for 2010 to 1% from 0.8%, while in 2011 the ECB expects the euro area to expand 1.2%, lower than the previous estimates of 1.5% due to decline in consumer spending

With regard inflation, he confirmed that the current low interest rate is appropriate while the emergency measures are non-standard measures are consistent with the bank's mandate and "temporary in nature." price stability is predicted to remain maintained over the medium term, while inflation projections stay tightly anchored.

For more: Trichet Press Conference - Forex News | IBTimesFX

Europe's single currency down, but not out

European Central Bank (ECB) President Jean-Claude Trichet isn't sugar-coating the issue. In an interview with the German magazine Der Spiegel, he said that Europe is in the most difficult situation since the Second World War, possibly even the First World War. Despite the dire straits, however, Trichet sees a way out of the crisis.
"What we need is a quantum leap in mutual surveillance of economic policies in Europe," Trichet told Spiegel. "We need improved mechanisms to prevent and punish misconduct."
Part of the problem in the eurozone comes from countries ignoring the European Stability and Growth Pact, which sets a budget deficit limit of three percent of a country's gross domestic product (GDP).

For more: Europe's single currency down, but not out | Europe | Deutsche Welle | 15.05.2010

Greece supplied incorrect financial information in order to join the European Monetary Union - by Matthew Brockett

Greece: European Central Bank President Jean-Claude Trichet said euro-region authorities will never again allow a country to join the monetary union if its fiscal data are inaccurate, as Greece’s were.

“Let me be very clear on this: Never again will we accept budget figures that do not reflect the facts,” Trichet said in an interview with Germany’s Focus magazine, the text of which was published by the ECB today. “Appropriate auditing must always be possible. As early as next month the European Commission will make proposals that will dramatically improve the relevant framework.”

Trichet also said Greece, whose deficit has ballooned to almost 13 percent of gross domestic product, has not respected the Stability and Growth Pact, which calls on members to limit budget shortfalls to 3 percent of GDP.

Greece and other euro- area countries “must do everything they can to put their national finances in order,” he said.

For more - Trichet Says Europe Won’t Accept Greek Example Again (Update1) - BusinessWeek

The Jutia Group: Jean-Claude Trichet: Debt, Stimulus & inflation in The Eurozone....

For the complete report from The Jutia Group click on this link

Jean-Claude Trichet: Jean-Claude Trichet: Debt, Stimulus & inflation in The Eurozone....

If inflation had an arch-enemy, it would be Jean-Claude Trichet. Since assuming his position as president of the European Central Bank (ECB) in November 2003, the Frenchman has made inflation-fighting his M.O. Trichet and his fellow ECB board members have a steely resolve to keep the 16-nation Eurozone’s inflation rate as close to the bank’s 2% target as possible. And although inflation isn’t a problem at the moment, many believe it’s only a matter of time before it will be. So inflation-fighter Trichet has made a pre-emptive call for restraint. In an interview with Europe 1 radio, Trichet said that with many European governments swimming in debt and massive amounts of money pumped into the ailing Eurozone economy, debt accumulation and stimulus efforts should stop.

WSJ: Trichet Defends Euro's Strength - by Andrew Monahan and Takashi Nakamichi

For the complete report from the WSJ.com click on this link

Trichet Defends Euro's Strength - by Andrew Monahan and Takashi Nakamichi

The European Central Bank's chief Friday brushed aside the view that the euro is weak, while saying that he is "very appreciative" of U.S. policy makers sticking to their strong dollar policy. Jean-Claude Trichet also signaled that the central bank may announce extraordinary measures for financial institutions at its next monetary policy meeting on May 7. At a seminar in Tokyo, Mr. Trichet said the view that the euro is weak "doesn't really seem to reflect the present situation." "When we started the euro," he said, "the euro-dollar (exchange rate) was at $1.17; at the moment I'm speaking, we are at around something like $1.31.

Irish Times: ECB chief defends response to downturn

For the complete report from The Irish Times click on this link

ECB chief defends response to downturn

EUROPEAN CENTRAL Bank (ECB) president Jean-Claude Trichet has defended the institution's responses to the financial turmoil that has shaken global markets for the past year and warned the turbulence is not over. "We still are in a market correction," Mr Trichet said at the Kansas City Federal Reserve Bank's annual monetary policy conference in Jackson Hole, Wyoming, that draws central bankers, economists and business people from around the world. "What has been done until now has been pretty well done, it seems to me, under those very difficult circumstances," he said, responding from the conference audience to a paper critical of the reactions of the US Federal Reserve, the ECB and the Bank of England to financial turbulence.