Sunday, January 18, 2015

The euro lows over eleven years – rionegro.com.ar

The euro lows over eleven years – rionegro.com.ar

The single currency debuted in January 1999 with a crossing of $ 1.174.

Today the way for the ECB to buy sovereign debt ultimately led the euro exchange rate below this level.

The fall of the euro drilled in the meeting this week, a psychological barrier of $ 1.174 which had begun trading at its premiere.

came to play on Friday this week $ 1.146 per unit in the international market.

It was over nine years that no single currency was below this threshold. To be more precise, it was a November 3, 2003 when the euro was at the slates of the main squares of the world $ 1.146.

After this date, the euro can not stop reassessed to quite touching $ 1.595, the highest historical value of the common currency, the July 21, 2008.

The declines of recent days have deflated his quotation to break the floor of $ 1.17. And extends the corrective already suffered in 2014, when he lost 15% against the dollar, its biggest annual drop since 2005.

The choice of the euro as one of the clearest bearish bets for 2015 is based largely on nearly reciprocal courses of monetary policy in the Eurozone and the US. Some investment firms not rule even in the 2015 parity between the two currencies. That is, the 1-1 would be present, as occurred during the first months of 2003.

While the Federal Reserve last for the next few months a first upward adjustment in interest rates, the Bank European Central could announce next week the launch of the expected program of buying sovereign debt. One of the last obstacles to the launch of these purchases has cleared this week. The European Justice has given the provisional program of direct purchases of government debt to the Central Bank announced in the summer of 2012 approval.

The analyst estimates include the possibility that the ECB will announce the start progress of these purchases at its next meeting, to be held on 22.

The entry into negative rates of inflation in the Eurozone accelerate the timing of intervention provided by the ECB, with the aim of bringing the IPC their objectives, close to 2%.

This is no possibility of a strong stimulus (emission) by the ECB is discarded to boost demand and thus offset the effects of falling prices worldwide who are now pushing for deflation.

In this regard, recent studies indicate that private prospects of a rise in inflation collide with the growing collapse of oil and weak growth forecasts Eurozone. In the same vein the World Bank has cut this week its GDP estimates for 2015 and 2016, due mainly to the slowdown in the euro area, Japan and several major emerging economies.

Of course it is an issue of the ECB further weaken the euro against the dollar. (Acn)

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