EU’s Almunia Warns Of “Disorderly Correction” Of Imbalances
Joaquin Almunia, the EU’s economic and monetary affairs commissioner, reflected comments from ECB president Trichet about the undesirability of excess forex movements. Almunia also mentioned the threat of a “disorderly correction” of imbalances, saying the “world economy hangs in precarious balance.
Almunia said the US is in favor of a strong currency and will act accordingly. When exactly this will happen remains to be seen.
EUR/USD and Cable reversed course following Almunia’s comments. EUR/USD is down 0.12% to 1.5339 and Cable is flat at 2.0129. USD/JPY is down 0.75% to 101.93 and USD/CAD is up 0.64% to 0.9968.