Exchange rate shocks gaining importance for eurozone inflation – research
Core inflation less influenced by exogenous factors, Bank of Spain research paper says
Headline inflation in the eurozone has become more dependent on external exchange rate movements since the early 2010s, according to research published by the Bank of Spain.
In Exchange rate shocks and inflation co-movement in the euro area, Danilo Leiva-Leon, Jaime Martínez-Martín and Eva Ortega aim to improve assessments of exchange rate effects on the fluctuations of prices across countries.
Their work decomposes the effect of external exchange rate shocks on inflation in individual euro
More on Foreign Exchange
Average reported daily UK FX turnover hits record high
Daily turnover of $2,881bn in October 2019, up 2% from previous high of $2,821bn in April
PBoC injects 1.2 trillion yuan as markets plunge
Chinese central bank eases to support economy as coronavirus spreads; Q1 GDP growth could drop to 4%
Spot volumes on platforms resumed downward trend in 2019
But an uptick was seen in FX swaps and forwards submitted for settlement
PBoC extends market closure as coronavirus spreads rapidly
Chinese central bank extends interbank markets closure and vows to maintain ample liquidity
