The Euro Is On A Jaw-Dropping Run — And That's Not A Good Sign

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The euro is just on such a tear. New highs almost every day.
The blame seems to lie at the feet of the ECB. Says SocGen's Kit Juckes in a note today:
The Kiwi's inability to benefit reflects concern that sexy currencies (AUD, NZD, KRW, MXN, CAD) have rallied so far against the US dollar that policy-makers will at the very least try and slow them down by expressing concern at valuations. The exception, at least for now, is the Euro. The ECB is doing nothing to talk down the currency and everything necessary to send it higher.

There's something very Japanese about what's going on in Europe. The economy is weak and arguably not recovering at all, exporters are increasingly getting frustrated by euro strength, and yet the ECB is doing nothing. In fact most of the talk is about repayment of LTRO loans (quasi de-easing). This is a recipe for an unwanted Euro surge.

 

As long as Goldman Sachs man is the head of ECB, "signs" for EURO will be similar

 
eurofreek:
As long as Goldman Sachs man is the head of ECB, "signs" for EURO will be similar

Well said!

 

The man said that he sees no conflict of interest in that so we should believe him now :):)

loumanchew:
Well said!
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