Recently, there have been more discussion about the possible curtailment of the program of repurchasing bonds from the European Central Bank in the market news. The strong growth of the euro since the second decade of January this year forced us to return to reflections about the difficulties that the regulator might face if the risky assets continue to strengthen.

Most recently, the governor of the central bank of Estonia said that the European Central Bank can quite painlessly wind up a program for redemption of bonds and it can do it at any suitable moment. They also talked about a possible tightening of monetary policy but no specific terms were mentioned. Why such an initiative was made by the representative of Estonia remains a mystery. There were no such statements from other ECB council members and ECB President Mario Draghi is quite conservative in his statements on this matter. This can be seen in his speech last Thursday during a press conference held after the decision of the ECB to leave rates unchanged.

Much will most likely depend on the kind of inflationary pressures that the eurozone will face at the end of the past and the beginning of this year. Good data, which may be published later this week, will seriously reflect on the possible curtailment of the QE program from the ECB in October this year.

The strengthening of the euro could soon cause concern for the European Central Bank since at the moment, the rate is higher by 5% compared to the data indicated in the forecasts of the ECB last year.

It is important to note that the average forecast for the beginning of the year was 1.17 euros. At the moment, the EURUSD pair has reached the significant level of 1.23 and continues to look confident. A growth of another 5% to the current one could slow inflation in 2019 by 0.5% compared to the expectations of the central bank. This will be a very significant problem. The slowdown in inflation will seriously affect the ECB's long-range plans to tighten monetary and credit policy. In this scenario, ECB President Mario Draghi is likely to remind the markets of fears associated with an excessively high exchange rate in the European currency. This will be a kind of verbal intervention by the European regulator which is not yet ready for a strong euro exchange rate. Despite all of this, it is still possible to tie up exports and obvious problems in this direction which the ECB tries so hard to avoid.

A good performance in foreign trade, of course, will have a positive impact on economic growth. The prices of exporters are still competitive to speak of an excessive increase in imports. This gives a kind of space to the central bank to adjust the exchange rate of the European currency.

However, do not forget that at the end of last week, US President Donald Trump said that he was clearly not happy with how the US trade relations with other countries, including the EU, are developing. From this, we can draw only one conclusion: the rate on the strong euro exchange rate, along with weak inflation and the expected problems with foreign trade, can be very damaging to the European Central Bank.