Euro's - cant get any worse can it?
Discussion
The French and German economies seem to shaking off their worst socialist instincts and are cutting taxes and starting to grow quite nicely. Has a result they look like a nice safe bet for riding out the worst of the credit crunch.
The US and UK are not such a safe bet.
You want a real appraisal of the economic outlook, look at exchange rates over the last 12 months.
The US is f-ed.
So is the UK not quite to the same extent.
The US and UK are not such a safe bet.
You want a real appraisal of the economic outlook, look at exchange rates over the last 12 months.
The US is f-ed.
So is the UK not quite to the same extent.
It can, but if you notice we (the UK treasury) and the US keep on tweaking our interest rates.
Interest rates are the biggest levers on a currency.
The very same levers that Bliar and brown-bottom wanted to give to the ECB.
If the 'one lever for all' euro (which is under great stress with hands pulling it both ways) actually starts cracking seriously then we will see chaos and mayhem in the eurozone.
ETA: Quote - do not expect the euro to win for too long.
Interest rates are the biggest levers on a currency.
The very same levers that Bliar and brown-bottom wanted to give to the ECB.
If the 'one lever for all' euro (which is under great stress with hands pulling it both ways) actually starts cracking seriously then we will see chaos and mayhem in the eurozone.
article said:
Hans Redeker, currency chief at BNP Paribas, said the ECB had its head in the sand. "They are not looking at the tidal wave that is about to roll straight over them. Balance-sheet stress in Europe is just as bad as it is in the US. The reporting periods are different, so the bad news has not yet come out," he said.
Critics say the ECB's staff have misread the eurozone's credit data, mistaking a 14.8pc surge in corporate loans for evidence of buoyancy. "This is merely a substitution effect. The market for securities has collapsed. Companies are instead turning to their existing credit lines. The question is what will happen when these run out," added Mr Redeker.
Julian Callow, Europe economist at Barclays Capital, said eurozone banks are cutting back "radically" on new credit lines, portending a slowdown in lending later this year. He expects the ECB to cut rates twice in coming months as the credit squeeze bites.
"The economy is grinding ever slower. In Spain there has been a dramatic deterioration in business confidence," he said. Spanish bankruptcies rocketed 74pc in the first quarter. Car sales fell 28pc in March. Half of Spain's 80,000 estate agencies have already shut down, laying off 120,000 staff.
Which will obviously help all the non-euro currencies. If I had spare cash I'd probably be looking for a harder currency - like swiss or danish.Critics say the ECB's staff have misread the eurozone's credit data, mistaking a 14.8pc surge in corporate loans for evidence of buoyancy. "This is merely a substitution effect. The market for securities has collapsed. Companies are instead turning to their existing credit lines. The question is what will happen when these run out," added Mr Redeker.
Julian Callow, Europe economist at Barclays Capital, said eurozone banks are cutting back "radically" on new credit lines, portending a slowdown in lending later this year. He expects the ECB to cut rates twice in coming months as the credit squeeze bites.
"The economy is grinding ever slower. In Spain there has been a dramatic deterioration in business confidence," he said. Spanish bankruptcies rocketed 74pc in the first quarter. Car sales fell 28pc in March. Half of Spain's 80,000 estate agencies have already shut down, laying off 120,000 staff.
ETA: Quote - do not expect the euro to win for too long.
Edited by Globulator on Friday 11th April 10:41
ATG said:
Yes, it makes holidays more expensive, but it's good news for UK business.
But bad news for European exporters. I expect we will see political pressure for EU rate cuts when there firms start to feel the pressure. Maybe we will see a lot of currency devaluations in the West.
Fittster said:
ATG said:
Yes, it makes holidays more expensive, but it's good news for UK business.
But bad news for European exporters. I expect we will see political pressure for EU rate cuts when there firms start to feel the pressure. Maybe we will see a lot of currency devaluations in the West.Yes the £/euro matters to their exporters, but don't expect the ECB to panic about rate cuts because of exports to the UK, or even US.
As for political pressures, I'm rather more inclined to think that covergence of UK and European FX rates and interest rates, ahead of bringing the £ into the euro zone is more of political interest to Brussels, than short term export fluctuations.
Edited by Timmy33 on Friday 11th April 11:41
thekirbyfake said:
ATG said:
good news for UK business.
Not necessarily. We import a heck of a lot of raw materials into the UK from (or via) eurozones and therefore the costs have risen dramatically in the past 6mths.(I think the original quote meant that it is good for UK tourist industry)
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