ECB's Villeroy Says Trump Should Desist From Making Currency Comments

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ECB's Villeroy Says Trump Should Desist From Making Currency Comments

Policymakers should respect international laws and desist from making targeted currency exchange rate comments. These views were aired by the governor of the Bank of France on Tuesday last week when he appeared in the interview with an Italian publication.

Francois Villeroy de Galhau, who is also a French central banker and a member of the European Central Bank's governing council, was responding to the asked about Donald Trump and his trader advisor’s accusation that German is using an extremely undervalued Euro in order to exploit the United States and its EU trading partners.

"Before criticising any country with respect to currency manipulation, any clever person should, first of all, give respect to international rules," Francois told Il Sole 24 Ore publishers.

In an interview which was published last week on Tuesday, Francois also stressed that the newly inaugurated U.S President Donald Trump and his advisors must give due respect to the international code of conduct agreed on by the G7 members.

He added that G7 is an informal bloc with the mandate of looking into the matters relating currency and therefore no individual is authorised to speak on its behalf. The body, on its agreement form, has advised against throwing targeted, unilateral or any remarks on currency exchange rates that are likely to affect another country in one way or the other.

Mr Navarro, who was appointed by Trump to head the new National Trade Council, expressed his concern when he was addressing the Financial Times editors. He likened the euro to an “implicit Deutsche Mark” whose under evaluation made Germany have an undue advantage over its trading partners. His comments suggest that the Trump’s presidency will focus on currency when dealing with trade partners.

Addressing various stakeholders in the United States, Mr Navarro also called the European country one of the main hurdles to a United States trade deal with the European Union. He also claimed that the ongoing talks about the Transatlantic Trade and Investment Partnership are dead.

Euro nears the biggest fall of 2017

In other news, the euro was on track for its biggest fall since the start of this year as political uncertainty appeared to affect this European single currency. The currency fell around 0.73% against the U.S dollar to $1.0671 at around lunchtime trade on Tuesday last week,

The leader of the anti-immigration and populist National Front party, Marine Le Pen, kicked on her campaign promising of French freedom on Sunday. In her presidential election campaign manifesto, Le Pen said that once elected as the president she will make sure that France has left the European Union. There is as political uncertainty surrounding this issue pushing the euro to weigh down further.

According to the opinion poll released by the polling firm Ifop, Le Pen continues to be the frontrunner in France’s presidential election with 25% of the vote. However, other opinion polls suggest that she is likely to be defeated by center-right candidate Francois Fillon or Emmanuel Macron who is an independent candidate in the final round of voting which will be conducted in May.

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