Euro Thrashing

An article by Gus    No Comments

This week has not been kind to the euro and by the looks of it there is much more turbulence ahead. The main problem with the euro is that there are just too many conflicting agendas and with every agenda comes a different euro-related decision maker trying to address the sovereign debt crisis. Every policy maker in Europe right now has a different worry and they are just not agreeing on a course of action.

Right now we have Germany worrying about the popular distaste for a Greek bailout and Greek debt in their banks, while the European Central Bank is focused on inflation and the IMF is just worried about lending more money if it can’t be repaid.
One of the biggest fears right now across the European Union is regarding restructuring and the fear of the unknown, yet everyone knows it must happen, one could say they need to rip off the Band-Aid at some point.

The Euro will be facing many more issues in the months ahead, as long as no one can agree on a plan of action; the entire European Union could be facing even more debt issues. Again this isn’t just due to the Greek debt problems, but with the overall layout the Euro system and many of the underestimated debt issues of every country. As soon as everyone agrees on a single plan of action and not tackle a different issue, the Euro should stabilize.

Be sure to keep a close eye on it this week, since we do have some trade balance information coming out on Monday and Tuesday. But in my opinion the Euro will keep getting thrown around until the policymakers can settle on something.
Gus FX