ECB’s Knot Says Trump Election Lead Marks Globalization Doubtsby
Euro surges against dollar as Trump wins key U.S. states
ECB’s Coeure pledges euro-area support in “uncertain” times
European Central Bank Governing Council member Klaas Knot said the likely victory of Donald Trump in the U.S. presidential election reflects skepticism over globalization, and expressed concern over the fallout in financial markets.
“There are doubts about the advantages free trade has brought us; that’s not right, according to me,” Knot, who heads the Dutch central bank, said in Amsterdam on Wednesday as the vote count showed Trump taking key battleground states. “We will follow the markets thoroughly.”
A rise in the euro against the dollar and any gains in bond yields threaten to undermine the ECB’s attempts to safeguard the euro area’s gradual recovery. The Frankfurt-based central bank is currently preparing for a Dec. 8 policy decision when it is expected to announce whether it will extend its 1.7 trillion-euro ($1.9 trillion) asset-purchase program.
The euro was up 1.7 percent against the U.S. currency at $1.1213 at 7:47 a.m. Frankfurt time.
Knot said a stronger euro wouldn’t be good for the Netherlands. He also said there is a “lot of uncertainty” about Trump’s economic plans.
ECB Executive Board member Benoit Coeure said in an opinion piece for Les Echos published Tuesday that the central bank “will continue to support the recovery of the euro area in an uncertain international climate.”