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Stanley Fischer: The transmission of exchange rate changes to output and inflation
Speech by Mr Stanley Fischer, Vice Chair of the Board of Governors of the Federal Reserve System, at the research conference “Monetary Policy Implementation and Transmission in the Post-Crisis Period”, sponsored by the Board of Governors of the Federal Reserve System, Washington DC, 12 November 2015
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"Because foreign central banks responded appropriately by providing additional
monetary accommodation, foreign interest rates have declined relative to U.S. interest rates,
encouraging investors to shift into dollar-denominated assets and in turn boosting the dollar. "
so the ECB went down an additional 0.2% so this caused EUR balance holders to offer their EUR balances to USD balance holders at 15% less than before the rate reduction?
So they didnt want to give up the 0.2% so they gave up 15% instead?
So EUR/USD is trading at 1.30 then ECB knocks off an additional 0.2% so the EZ people quickly drop their offer for EUR balances in USD terms down to $1.14?
#hmmmm
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