Life would be a little easier if you stick the EUR/USD that importantly pair of Forex and bellwether which could currency market, simply choose a direction and with it. It appeared during the financial crisis only during the recovery phase apparent increase, fell during the sovereign debt crisis and rose during the shift, then fell as risk appetite disappeared, only to again increase in September, en route to a 5-month high.
There are a handful of factors of euro strength currently based are all generally can explain the risk by the fact is "on" at the moment and the markets are moving way so-called safe haven currencies and back towards growth investments. Of course, that could change tomorrow (or even 5 minutes from now!), but at the moment the risk-taking is high and Euro symbolizes danger.It doesn't matter how ironic projected growth in the EU for the year at 1.8%, while the rest of the world (ROW) GDP probably top wird.Alles what counts is 5% when compared the dollar and Yen, pounds, Swiss francs to a lesser extent) euro as currency perceived risk.
Of the euro cause is helped by the ongoing "currency wars," heated last week with Japan's entry into the game. Basically on central banks around the world now in competition with each other, to their currencies depreciate.On the other hand has the European Central Bank (ECB) decided to continue on the sidelines (in favor of fiscal austerity) that force up to the euro, is (or rather all other currencies down) .Zu questions worse, "the Federal Reserve indicates this summer that it... often can facilitate monetary policy further as printing money to pump up the economy." As a result set, "the euro looks on in a trend to keep climbing that looks increasingly entrenched."
There are certainly those who claim that reflects recent rise of the euro to renewed confidence in the euro-zone economy and prospects for the solution to the debt crisis of the EU. Finally, most euro members to reduce their budget deficits, in 2010 and auctions new bonds are once again over-subscribed. On the other hand, the interest rates on the pigs (Portugal, Italy, Greece and Spain) have risen multi-year highs as investors finally try serious efforts at pricing the possibility to make standard.
Moreover, the credit markets in the EU hardly work and large institutions remain the ECB credit facilities for financing depends on. Finally should be forgotten it, the only reason crisis due to the massive support (€ 140 billion), which was extended to Greece. When this program expires in less than three years, the tax problems of Greece (and the other PIGS) exposed again and a new (temporary solution) have suggested solution.
Each analyst has pointed out, are not the EU resolved worden.EU members have sent certainly proved fiscal problems to solve in the acute crises and keep the ECB certainly deserved recognition for the credit markets are functioning but none has proposed a viable solution for the repair of the Member States tax and economic health.Devaluation of the currency is impossible.Sovereign default is prevented.That leaves pay cuts and higher productivity than only two paths to balance.The former could be achieved, inflation, but the ECB seems reluctant to allow.
For better or worse seems that these problems on the road have urged the EU and if everything according to plan, you must be for 2-3 years checks be. for now the euro is probably safe, and can even gedeihen.Short positions in the euro furious speed carried out and data show that it is still plenty of room for more entladen.Inflation dampened economic growth is stable, and so far have not any opposition to the euro expressed the ECB rise. while I promote this optimism with the caveat that "traders willingness euro lower from time to time on the slightest news or rumor downgrade to the eurozone sovereign or Bank ratings smack showed", the general trend of the euro is now indisputable.
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