PDA

View Full Version : What is happening with the Euro?



globaleconomicollaps
02-01-13, 08:48 AM
Euro hits 1.36 today and looks like it was hit with a cattle prod. What is going on? I check the chart every hour like a Nervous Nelly. I'm losing my shirt on gold priced in euros, but at least Dollar zone products are cheaper. I'm loading up on Tupperware ;-)

jk
02-01-13, 11:57 AM
draghi's threat to do "whatever is necessary" is obviously not as potent as real, actual printing such as is happening in japan and the u.s. also the endless euro crises - lately italian bank scandals and spanish political payola, whatever- just don't generate the excitement they used to. clearly, the eurozone needs to up its game in the crisis arena if it's not going to actually print. the eurozone is "losing" the currency war, at least for the moment.

GRG55
02-02-13, 12:16 AM
draghi's threat to do "whatever is necessary" is obviously not as potent as real, actual printing such as is happening in japan and the u.s. also the endless euro crises - lately italian bank scandals and spanish political payola, whatever- just don't generate the excitement they used to. clearly, the eurozone needs to up its game in the crisis arena if it's not going to actually print. the eurozone is "losing" the currency war, at least for the moment.

With Germany in recession a rising currency will do wonders for their external-to-EU exports. Based on what Germany did last time it fell into recession, Draghi should be stockpiling ink and paper I would think...as the command from Berlin to hit Ctrl-Alt-Print would not seem too far away...

jk
02-02-13, 09:21 AM
With Germany in recession a rising currency will do wonders for their external-to-EU exports. Based on what Germany did last time it fell into recession, Draghi should be stockpiling ink and paper I would think...as the command from Berlin to hit Ctrl-Alt-Print would not seem too far away...
i've said many times here that no major action will happen in the eurozone until germany is in recession. what i've trouble sorting out is the effect of the german elections come september. does merkel push for action before the election, to make germans happier now, or does she just promise action after the election to get them to the polls?

GRG55
02-02-13, 01:44 PM
i've said many times here that no major action will happen in the eurozone until germany is in recession. what i've trouble sorting out is the effect of the german elections come september. does merkel push for action before the election, to make germans happier now, or does she just promise action after the election to get them to the polls?

She would seem in an unenviable position. If peripheral EU nation sovereign yields start to blow out again there will be pressure on the ECB. If the French economy continues to contract in the 1stQ there will be pressure on both Germany and the ECB. If the German recession intensifies through the spring and early summer...

September seems like an eternity away.

Alvaro Spain
02-02-13, 03:29 PM
Euro hits 1.36 today and looks like it was hit with a cattle prod. What is going on? I check the chart every hour like a Nervous Nelly. I'm losing my shirt on gold priced in euros, but at least Dollar zone products are cheaper. I'm loading up on Tupperware ;-)

I, for one, am not surprised. Last summer I sold my USD investments since I expected the EUR to appreciate. I expect now that the euro will continue to appreciate, perhaps reaching 1.40-1.45. I am waiting for the 1.40 level to buy USD. After 1.40 is reached perhaps the euro will decline in value. We'll see what happens.

The logic is twofold:

1.- The currency market is driven by appearances more than realities. Last summer the european crisis reached its lowest point and the message was given that Europe would solve its problems, or, at least, that an earnest effort was being made to solve the issues. Perhaps Europe won't solve any problem, but what counts for the currency markets (IMHO) is perception much more than reality. In other words, currencies are marketing-driven.

2.- Some people must make money. A rise from 1.20 to 1.30 wouldn't make enough money. A rise from 1.20 to 1.40 can make the right people very rich.

All I am stating is my own opinion. I could easily be wrong.