Make money betting against the euro – Global Investor

In the coming days the president of the ECB will announce economic measures under the program of monetary expansion in the European region and investors can take advantage of them for huge profits.

Since the beginning of 2015, the European Central Bank (ECB) is implementing a program of monetary expansion amounting to 600,000 million euros.

However, the Eurozone continues to suffer from deflation and shows no signs of a substantial recovery, why are expected in the scheduled meeting for the next 10 March, ECB President Mario Draghi announced a new set of stimuli.

Given the possibility, investors should be aware and take advantage of business opportunities that will arise from measures to run.

Odds

Macroeconomic data in the region recently published reaffirm that position Draghi will be more flexible.

according to information Market Watch , the prices in the euro zone fell 0.2% in annualized comparative despite spending has increased, the economy continues gangplank.

It is therefore expected that Draghi and his team implement more aggressive policies to revive the economy.

More injections of money

The conditions are given for new stimuli but what are the options?

According to experts there are four alternatives:

First, the ECB could intervene directly in the currency market by buying selling dollars and euros to weaken the local currency.

Given that European countries are major exporters, they favor them have a weaker euro, since beyond the attractive prices, this scenario leads to an increase in costs industrial operations, which consequently drives inflation.

The depreciation of the euro could lead to a dollar peg, so bet on instruments playing against the currency can be a great success for investors.

Another alternative is the purchase of assets by the entity. A higher price of these instruments could revive the economy in view of encouraging spending by investors who are more confident.

This kind of strategy has worked in the past in the United States and the United Kingdom at a time when the central banks did not have to intervene directly. That is why a scenario in which the body plays a more representative role, stock indices can reach skyrocket.

Thus, European equities is outlined with a high potential for your portfolio.

Third, the ECB could recapitalize banks that do not enjoy greater strength. This would directly benefit the actions of the financial segment.

Finally, the agency could implement what is known as “ helicopter money “, which is nothing more than direct injection of money into the financial system.

the measure in question would stimulate the construction and infrastructure sector having as much cash in circulation.

In this context, more jobs in companies category and all actions associated with the activity and consumption would be generated would experience a boost.

This last option throws an investment opportunity longer term than before.

Although these policies difficult to implement because of the impact they can cause, is expected to Draghi at risk in order to revive the European economy one way or another.

In this regard, investors should analyze the opportunities cited in order to seize the assets in the region listed codes currently.