ECB President Lagarde (Q&A) says ECB does not target an exchange rate, recognises though that it is important for the economy; ECB keeps a close eye on developments

• USD has depreciated against the EUR, but not in the last few days
• The significant change has been since March 2025
• Since the summer, EURUSD has fluctuated in a range
• Impact of FX appreciation since last year has been incorporated in its baseline
• Reiterates, ECB always monitors pass-through

Lagarde's remarks suggest that while the ECB does not explicitly target the exchange rate, it acknowledges its economic importance, emphasizing a vigilant approach to currency fluctuations. The USD's recent depreciation against the EUR, particularly noted since March, could spark speculation on future ECB policy responses, especially if these currency trends impact inflation or growth outlook. Overall, this vigilance reinforces the interconnectedness of FX movements and central bank actions, particularly in the context of the USD's trajectory.