Visitors Now:
Total Visits:
Total Stories:
Profile image
By silveristhenew (Reporter)
Contributor profile | More stories
Story Views

Now:
Last Hour:
Last 24 Hours:
Total:

Great Graphic: Euro–the Big Picture

Monday, November 14, 2016 21:26
% of readers think this story is Fact. Add your two cents.

(Before It's News)

B4INREMOTE-aHR0cHM6Ly80LmJwLmJsb2dzcG90LmNvbS8tRDBaMERjVmhNUGMvV0NuVmhzSnpsd0kvQUFBQUFBQUFXU1kvTG10TEhsTkI2N3NwYTRhMmE1c0xQd1R1T1lOYWdwa0hRQ0xjQi9zNDAwL2V1cm8lMkJiaWclMkJwaWN0dXJlLmdpZg==

marctomarket.com / by Marc Chandler / Nov 14, 2016

The euro has dropped almost six cents since the knee-jerk post-election bounce to $1.1300. The immediate driving force is the anticipated policy mix in the US. With the US economy already growing near the trend pace, and the Federal Reserve’s objectives of full employment and price stability (defined as 2% increase in the core PCE deflator), the central bank was already poised to lift rates.

The fiscal stimulus that Trump’s economic advisors have not backed away from is $1 trillion. Former Treasury Secretary Summers, a long-time advocate of deficit-financed infrastructure investment objects to the mix of the tax cut and new spending, but the magnitude is nevertheless breathtaking.

While most economists are focusing on either the higher US interest rates and a likelihood of a somewhat more aggressive Fed tightening cycle, or the possibility of a dramatically more stimulative fiscal stance. We see the combination (the policy mix) as an exceptionally potent force that will continue to propel the dollar higher.

Interest rate differentials provide an incentive structure for investors. Investors are paid to be long the dollar against most major currencies. This also means that for any given level of volatility, it is cheap to hedge European or Japanese exposure.

READ MORE

The post Great Graphic: Euro–the Big Picture appeared first on Silver For The People.

Report abuse

Comments

Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Top Stories
Recent Stories

Register

Newsletter

Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.