After year lows touched in June to 1.19, the euro has made a remarkable run against the dollar. Let's summarize reasons.
problems that had burdened the euro, in particular the situation in Greece and the PIGS , although far from resolution, have just been buffered by the newfound willingness of policy makers not blow up the European single currency.
However if this will be stable over time we will see him since November 2011 when, in all likelihood, the governor of the Bundesbank Alex Weber pass at the helm of the ECB taking the place of Trichet .
The second aspect that is playing for the euro is due to improving the economic prospects of the EU , mostly in Germany for the rest because we are still back in conjunction with the risk for a relapse into recession in the U.S..
The third point that makes you want the markets to bet on the euro again regards statements the Federal Reserve , which seems determined to intervene with a new quantitative easing , or print money. And since with increasing quantities of a given product on the market its price resize the announcement of new liquidity traders are falling stocks dollars in the portfolio.
The fourth reason is probably the most crucial of all: differential between interest rates between the two currencies is increasing day by day . In fact, we find ourselves with a Euribor 3-month period has passed the psychological threshold of 1%, while the libor U.S. stable under the 0.30% sailing.
Historically, the spread between the rates was a crucial element in composition of the exchange ratio and a trend which, if not substantially change things, should continue, unless the big surprises we may find ourselves to the psychological threshold of 1, 50% and then even further, down to the absolute maximum of 1 .60.
The capital flow, the same risk, where they are better paid, the U.S. and now even more shabby look of old Europe.
So what determines the value of the euro-dollar cross bears more resemblance to a " Ciappa -no", where according to the event, operators indirazzano to the uniform that, from time to time, is considered less dangerous.
Meanwhile G20 Korea , breaking news, is proclaimed the "blood volume bbene " through the agreement on paper to avoid competitive devaluations of currencies.
We'll see, especially for problems that the strong yen is causing the Japanese exports, as this proclamation will be maintained in practice.
