Rhetoric over FX rates is dangerous - ECB's Constancio

BRUSSELS Thu Feb 14, 2013 5:40am EST

BRUSSELS Feb 14 (Reuters) - Policymakers must be careful not to ratchet up rhetoric about "currency wars", which could lead to something worse happening, European Central Bank Vice President Vitor Constancio said on Thursday.

Contradictory remarks from officials from Group of Seven countries about a G7 statement designed to cool international currency tensions have only led to more market volatility.

"We have to be cautious in my view not to build up the rhetoric about currency wars, because if we build up the rhetoric the danger is there that something worse can happen," Constancio told a forum in Brussels.

"The euro has been volatile ... so the situation is what it is," he added. "We look at the exchange rate because it has an impact on the inflation rate that we are analysing all the time."

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