Draghi Responds To Trump Tirade: "We Don't Target The Exchange Rate"

Update 3: After a busy day in Sintra, Mario Draghi has apparently found time to rebut President Trump's accusations. In comments to the press, the ECB president defended the ECB's approach to telegraphing policy decisions and insisted that "we don't target the exchange rate."

  • DRAGHI: PROTRACTED UNCERTAINTY IS A MATERIALIZATION OF RISK
  • DRAGHI: BE 'CRYSTAL CLEAR' THAT OUR INFLATION AIM IS SYMMETRIC
  • DRAGHI SAYS `WE DON'T TARGET THE EXCHANGE RATE'

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Update 2: President Trump has apparently shifted from currency manipulation to stock market manipulation, something that we've said is more than a little ironic, given the Fed's equity pumping legacy.

In a tweet, he specifically complained about the DAX's gains on Tuesday, accusing Draghi of manipulating stocks higher, even as US stocks followed Europe higher.

DB

Somebody should tell him you're not supposed to say the quiet part loud.

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Update: Trump isn't letting this go, and is now attacking Draghi because European stock markets rallied on Draghi's stimulus remarks, which isn't "fair" for the US.

Now, how long will it take for Trump to tweet about bund yields at new all-time (negative) lows?

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President Trump wasn't thrilled by this morning's selloff in the euro, and for the first time, is lashing out at ECB chief Mario Draghi, accusing him in a tweet of intentionally manipulating the value of the shared currency with his stimulus talk.

Earlier, Mario Draghi sent the euro tumbling and German yields to record lows when he said that rate cuts or more asset purchases could be part of the central bank's toolkit for fending off a recession.

Jerome Powell might be breathing a sigh of relief now that another central banker has, at least temporarily, taken his place in Trump's cross hairs. However, we would urge him to wait for the inevitable part II later this week, where Trump slams the Fed for not cutting rates or being sufficiently dovish during this week's meeting, which would have the added benefit of weakening the dollar, or part III, where Trump announces that he's retaliating by moving ahead with those auto tariffs (or perhaps Mexico-style blanket tariffs), sparking a trade war with the EU and Japan (even though the administration had earlier kicked the can 6 months down the road).

In theory, of course, this could risk setting off a vicious cycle.

One reporter pointed out the irony of Draghi blaming Trump's trade war for the ECB's decidedly more dovish stance, then Trump attacking Draghi over it.

The euro spiked following Trump's tweet.

EUR