Till only recently, the EURO was being considered a viable alternate World reserve currency, when the USD looked like it was on its last legs ! Now the USD is once again being viewed as the last ''safe'' reserve currency option!
Turmoil in ''Club Med'' has resulted in considerable stress for the single currency.
Bailouts are going to prove costly and stressful for Germany and France, who are barely just ''out'' of recession themselves, if you count quarterly GDP growth rates of under 1% as ''non recessionary''!
A weaking EURO will also stress out the US Fed. US exports will suffer, while European exports to the U.S.A will get a boost. To put it another way EADS (Airbus) looks all set to use the new found currency advantage against Boeing! The weak USD has undoubtedly boosted Boeing's profitability over the last 8 years!
Meanwhile, Gold prices in Euros are at new highs.
No comments:
Post a Comment