Sunday, June 12, 2011

EUR/USD 1,4349

On the BNP Paribas weekly report, Clemente De Lucia affirmed that the ECB will continue its tightening cycle as inflation is on the rise and the bank will use it standard instrument: key rates to keep inflation in line with price stability in the medium term. “An unbalanced recovery and persistent tensions in financial markets will induce the ECB to proceed in its tightening cycle at a modest pace. Apart from anything else, the strong euro has the effect of tightening monetary and financial conditions, reducing the need for higher rates.”

According to De Lucia the differences between monetary policy in the US and in Europe are widening yield spreads, strengthening the euro that “is likely to remain at elevated levels for a while (the OECD estimate of fair value is around 1.25, based on PPP for GDP), before easing next year when the Fed is expected to start its own tightening cycle.”

source: fxstreet.com

19 comments:

  1. So, nothing changed. Good. :D

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  2. This went completely over my head, lol. But good luck with the blog.

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  3. What kind of credentials does it take to swing this kind of work?

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  4. i remember when USD was stronger than EUR. and EUR will become stronger than GBP soon!!

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  5. Good report! Unbelievable to see how these policies are treated.

    Personally - we should all switch to ONE currency.

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  6. I've been playing around with bitcoin markets recently.I cont expect to make any money, but its a fun experiment.

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  7. @Blood

    I think that's not going to be easy.
    If only that was started just after the concept of currency was created, it would have been all ok i guess.

    If we switch all to one currency, the system will all be in chaos with all those conversions!

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  8. The Year 2120: The Euro is the official currency of the entire world.

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  9. @D3N00B1F13D - It would at first, but I think universal language, currency, measurements ect would help us as a civilization so much. But your right it would cause so much chaos.

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  10. It's about time there was a sexy finance blog, online analysts can be so stale.
    This is good news but as long as the AUD stays stronger than USD I'll be happy, and amazon will be cheaper than every store in the country (:

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