MUNICH (AFX) - President of the Ifo economic research institute Hans Werner Sinn said the euro is not expected to recover against the dollar until banknotes and coins come into circulation in January next year.
"We are not expecting the euro to recover for the time being," Sinn told a news conference. "This will probably not be the case until the actual physical introduction of the euro," he said.
On the European Central Bank's monetary policy, Ifo said in a statement it expects a further "small" interest rate cut in the course of this year.
"When the real low value of the euro is taken account of, the monetary conditions are truly favourable," he said.
Ifo said wage settlements should remain moderate, owing to the unfavourable conditions in the labour market. "But there are still not unsignificant risks here owing to the current strong price hikes," it said.