Economic analysis

[Stringmine]

eternalfuture

Like you say, the ECB guys have done their job for now and it won't be long before sentiment takes over once again but they may want to tinker with the "strong and stable" axiom as financial markets have come to take the statement as a green light to buy Euro's.

It seems that it's the rapid movements that are causing the concern rather than the rise per se as the rise should be counter balanced by global economic growth and help also dampen inflation worries. Having staid that, a stronger Euro will erode export competitiveness and this therefore, is a hot potato at a time when the Eurozone economy of finding it's feet.

[novice]

Stringmine

I had a look at your profile:

Biography: Don't let Europe rule Britannia

I am guessing that you are a supporter of the pound?

[Stringmine]

Only when I'm long GBP

[Stringmine]

Novice,

It was interesting to read the devastating analysis from the Bundesbank of how the single currency has failed to boost Germany's trade with the rest of the Euro zone - in fact, it's grown at a much slower rate than trade with the rest of the world. The introduction of the single currency was widely believed to increase trade between different members of the Euro area by reducing the transaction costs and eliminating exchange rate uncertainty. Their report even questions the importance of the single market; "... boosting and redirecting trade (is) not immediately identifiable for Germany" it says.

[robsky]

Hi all,

Slightly off the topic but still has merit to our conversation ;-)

“Market valuation models are like sausages. The more that you know about what's in them and about who made them, the less you tend to trust them.”

Water – it’s cold in summer in Cape Town ‘cos of currents during this time of the year. It’s much better as you go along the cost (either way).

Cheers,

[novice]

Stringmine

I thought much the same:

http://www.moneytec.com/forums/_showthread/_s-/_threadid-6596

Originally posted by novice


A "new" and expanding internal market is not really going to compensate for the for the damage to exports of a rising Euro. IMHO Is it really going to have much of an effect? The common market came in a fair time ago. The new members from the East in economic terms are small at present. The former currencies that now make up the Euro were well correlated (defacto monetery union before?).

[Baruch]

A good place to start:

www.dailyfx.com