Exchange rate movements like the dollar depreciation help to unwind imbalances in the world economy, even though they cannot do the trick entirely on their own. The domestic causes of those imbalances need to be addressed. For Europe, the main task in this respect is to boost growth potential by embarking on structural reforms in order to ease existing economic rigidities.
The monetary policy strategy of the euro area does not target the exchange rate. The external value of the euro is one of many factors shaping the prospects for price stability. The ECB Governing Council closely monitors developments in the euro’s exchange rate.