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ECB discussed euro's rise due to impact it has on prices -Lagarde

    FRANKFURT, Sept 10 (Reuters) - The European Central Bank
discussed the appreciation of the euro at its latest policy
meeting due to the downward pressure it puts on inflation, ECB
President Christine Lagarde said on Thursday.
    The euro has firmed around 8% against the dollar since the
spring and 4% against a basket of currencies, eroding the 
competitiveness of exporters and dampening inflation by making
imports cheaper.
    "The Governing Council discussed the appreciation of the
euro," Lagarde told a news conference.
    "Our mandate is price stability, and clearly to the extent
that appreciation of the euro exercises negative pressure on
prices, we have to monitor carefully such a matter," she said.
    "But as you know, we do not target the exchange rate,"
Lagarde added.
    The ECB has long said it has no exchange rate target, but
policymakers often grow uneasy when the euro approaches $1.20,
which it broke last week.
    ECB Chief Economist Philip Lane warned then that this level
would be factored into policymaking and would thus have a wider
implication for the economy. 
    Adding to the ECB's headache, the U.S. Federal Reserve last
month tweaked its own inflation target to allow for excess
inflation after downturns. 

 (Reporting by Balazs Koranyi; Editing by Catherine Evans and
Hugh Lawson)