ECB board member Bini Smaghi regained all the debate about the need to raise interest rates in Europe, with some fairly hawkish comments in a dinner. Bini Smaghi suggested that "the degree of coordination of monetary policy should be monitored and, if necessary, adjusted on the background of a gradual economic recovery and rising global inflationary pressures. He argues that the retention of inflationary expectations under control is one of the key objectives of monetary policy, and that the ECB may need to act on pre-emption. Inflation in Europe now stands at 2.4% and may grow further in coming months in response to the acceleration of producer prices. Trichet has drawn the attention of financial markets after the January meeting of the ECB only to dilute the waiting to the last meeting. In response to comments Bini Smaghi, the euro soared to 1.3550 just before the peak around 1.3650.
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