Coelacanth

Axel Weber Rescues the Euro

I agree the euro may see some upward strength towards the 1.48 -1.49 handles just because the move down is looking a little extended.

That said, I think people are dreaming if they think the ECB is going to hike rates again. The EU has made no bones about their desire to see a weaker euro to help their exporters. That said, central bankers don't like to see their currencies fall in to death spirals (like USD earlier this year) and I suspect Papademos's jawboning the other day was more an attempt to make sure the depreciation of the euro is more orderly rather than sudden. It's also telling he got on the wires just after German CPI showed clear inflation easing in August.

Another ominous sign is the German unemployment read for August ballooned way above consensus (-10,000 consensus vs. -40,000.00 actual).

The divergence between ECB rhetoric and economic reality on the ground is widening.