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Euro slipping

  • The European Central Bank's monetary easing earlier this month has spelled trouble for the euro, and analysts say a sentiment shift has attributed further weakness. After hitting a 2-1/2 year high hit in early June, the euro has declined over 3%, due in part to the ECB's negative interest rates, and cut to its main lending rate.
  • Carry trades, which borrow money in a currency that is backed by a low interest rate to fund investments in higher-yielding assets, have also increased using the euro.
  • Both the ECB's monetary easing and carry trades have been main factors in causing a declining euro. Data released last week shows the net short position for the euro/dollar reaching its highest level since late May 2013.
  • ETFs: FXE, EUO, ERO, DRR, EUFX, ULE, URR
Comments (1)
  • Brian Bobbitt
    , contributor
    Comments (1899) | Send Message
     
    The euro is solving their problems. Certainly not the way I would have done it, probably making the situation worse. The leaders of the E$ have found ways to keep it 'afloat'. The currency was heading into the dumper, and now isn't.

     

    The value of the E$ was rising out of control, getting to the 1.40 level, and is now getting some relief. It seems when a currency is headed down, all think it is bad, and for a currency to be strong, boy ain't that cause for celebration.

     

    Well, both of those statements are true to a point.

     

    Simply put: The stronger a currency gets the more it is wanted, then if it gets too 'hot', its bad for the country using it as their products get too expensive in the needs of exporters, and inflation ensues in the country using said currency.

     

    So, that in a nutshell, IMHO, is why the controllers of the currency, stopped its rise and will continue to keep it in the zone of convertibility so that trade can continue normally, and not be truncated by inflation or deflation.

     

    Quite frankly, I'm amazed there is still a Euro-Dollar.

     

    Quite frankly, I'm amazed we don't have run-a-way inflation in America.

     

    So, I shall continue on my merry way and be happy the end of times has not hit yet.

     

    I will be happy when someone wakes me up, and says Monday has been cancelled.

     

    Capt. Brian
    The Lost Navigator
    17 Jun, 10:16 AM Reply Like
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