The ECB's chief economist, Philip Lane, said that “the euro/dollar exchange rate matters” in the eyes of the ECB, stopping the rise of the European currency sharply. Waiting for the ECB meeting next Thursday

The rise of the euro was halted on Wednesday by a statement by the ECB's chief economist, Philip Lane, saying that “the eurodollar exchange rate matters” in the eyes of the ECB. On Wednesday evening, the euro fell 0.58% to $1.1842, after exceeding the $1.20 threshold the day before, posting a 12% gain in 5 months, the highest in two years. The dollar index, which measures the evolution of the greenback against a basket of six currencies, including the euro, regained 0.44% to 92.75 points on Wednesday evening

Although at first glance, Philip Lane's comments may seem almost trivial, they had a significant psychological effect on investors, signaling that the ECB was not ready to see the European currency appreciate to a level that penalizes eurozone exports. It is therefore very rare for the European Central Bank to comment on the evolution of currencies. This fall in the euro was also welcomed on Wednesday by European stock markets, with the EuroStoxx 50 jumping by 1.84% and the CAC 40 rising by

Negative inflation in the eurozone in August, the ECB expected

The markets have thus begun to speculate on new support measures from the ECB, which will hold its back-to-school meeting next week, on Thursday, September 10, which will be followed by a press conference by its president Christine Lagarde. Any further easing would further weaken the euro, while giving a boost to the eurozone economy, where prices fell in August for the first time in 4 years. Inflation thus came out negative by 0.2% in August, according to Eurostat, raising the specter of deflation against the background

In addition, Germany, the region's largest economy, showed signs of weakness on Wednesday, with a surprise drop in retail sales of 0.9% in July over one month, while economists expected an increase of 0.5%. In June, sales had already fallen by 1.9%

German Finance Minister Olaf Scholz said on Wednesday that the European economy is showing signs of recovery but that the worst may not have passed.

The new Fed strategy could weaken the dollar permanently

Many economists believe that over the medium term, the dollar should remain in a downward trend, as further Fed easing measures are anticipated. The dollar has thus accelerated its decline over the past week, after the presentation by the American Federal Reserve of its new monetary strategy.

At the Jackson Hole symposium, Fed Chairman Jerome Powell indicated on August 27 that the Fed would no longer apply a preventive rate hike strategy in the event of a temporary rise in inflation above the Fed's 2% target, or of tensions on the labor market. He thus signalled that policy rates should remain at the bottom for an extended period of time...

On Wednesday, the Fed's Beige Book reinforced this view by pointing out that the economic rebound faded in August in the United States, particularly on the employment front. The day before, one of the Fed's governors, Lael Brainard, said that the institution would be required to take further measures to support growth in the coming months, probably after the presidential election