However, consumers and firms can react asymmetrically, since appreciation dampens inflation pressure on the one side but challenges the competitiveness of firms on the other. If exchange rates and their impact on the economy are apparently so difficult to explain, let alone predict, should monetary policy interfere? As for the euro area, the ECB has no exchange rate target.
Moreover, it is to be expected that overall HICP inflation rates will fluctuate around 2% in the coming months. The strengthening of the euro exchange rate should have a moderating effect on inflation. However, it is difficult to quantify the size and establish the timing of this effect.