How The Euro Keeps Defying Doomsayers
In his latest Macro View, Richard Jones, an FX strategist who writes for Bloomberg, explains the resilience behind the common currency which has ignored every adverse piece of news thrown at it, and identifies the one main reason it keeps “deying the doomsayers.”
* * *
Euro Can Keep Defying Doomsayers, Thanks to Draghi
The euro rally is sustainable even amid the latest flare up of European political uncertainty.
A buoyant macro-economic environment partially explains the resilience, but most credit should go to the backstop offered by the ECB.
The laundry list of challenges — coalition talks in Germany, Catalan secession, an Austrian election — has failed to meaningfully impact either the single currency or the region’s sovereign yields. The Bloomberg Euro Index trades only about ~1% lower than the multi-year high seen in late August.
Mario Draghi’s “whatever it takes” rhetoric still inspires confidence in investors. Then add the not-insignificant fact that the ECB has bought more than 1 trillion euros ($1.19 trillion) of securities. Even with the specter of a potential taper, buyers of peripheral bonds know the central bank has their back.
If real pressure emerged, the ECB would doubtless be willing to deviate from the capital key to contain those risks. The bank has a proven track record of bending the rules when required.
A pick-up in both sentiment and hard data is contributing to the euro’s positive momentum, leading to a view among policy makers that the currency is rising for the right reasons,
Political and economic challenges remain. The case for structural reform remains as strong now as it has at any stage since the single currency was adopted. But investors seem optimistic that this can be achieved, especially if France and Germany begin to co-operate more than they have in the past.
Positive developments on that front would just provide the nitro boost to the durable and resilient euro appreciation trend.
Source: http://silveristhenew.com/2017/10/12/how-the-euro-keeps-defying-doomsayers/
Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.
"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.
Please Help Support BeforeitsNews by trying our Natural Health Products below!
Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST
Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST
Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST
Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!
HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.
Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.
MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)
Oxy Powder - Natural Colon Cleanser! Cleans out toxic buildup with oxygen!
Nascent Iodine - Promotes detoxification, mental focus and thyroid health.
Smart Meter Cover - Reduces Smart Meter radiation by 96%! (See Video).