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ECB won’t worry about euro-dollar parity

We think that the euro will fall to parity against the US dollar next year but will strengthen against some other currencies, such as the renminbi, and on a trade-weighted basis we forecast it to be little changed. So the effect of FX moves on growth and inflation should be limited. If the euro fell by more than we expect, policymakers would be reluctant to openly welcome the move but privately might see it as helpful.

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