Hozzászólás

The competitive devaluation theme is gaining further cachet by the hour. Today's Wall Street Journal contains a prominent article on the subject, which is the obvious driver in the currency market. As we discussed yesterday, the Euro is the winner of the moment on its relatively tight monetary policy as long as the market is willing to look the other way on the risk of defaults. EURUSD touched new highs today as it may focus on the 1.39 area next barring new developments or a massive dive in risk appetite in coming days. As we write this, German Chancellor Merkel is out commenting on the need for EU Treaty changes for new crisis management, that the rescue fund should not be made permanent and that creditors should take more of the risk in the future, causing a bit of a wobble in the EUR upside.