ECB Monitors Euro's Recent Strength Amid Stable Economic Outlook

The European Central Bank (ECB) is closely observing the recent appreciation of the euro, but Governing Council member Yannis Stournaras suggests there is no cause for alarm. According to Jin10, the Greek central bank governor stated, "We are monitoring the exchange rate and all variables affecting economic activity and inflation." He emphasized that the euro's strengthening since March 2025 has been factored into the ECB's forecasts, and the euro-dollar exchange rate remains within historical trading ranges. Stournaras noted on Friday that most of the appreciation occurred in the first quarter of last year, and there has not been significant volatility to warrant a change in the ECB's policy direction. Most investors and economists anticipate that borrowing costs will not decrease further after eight rate cuts in the current cycle. Stournaras believes the risks to inflation and economic growth prospects are balanced, describing officials as "very confident." He added, "We do not think we should change our course of action. We rely on data-driven decisions, which have proven to be a very good approach so far."