Will Euro Rally Turn From Blessing to Curse? - Helikoptrarna närmar sig
The single currency is up about 14% against the dollar this year as confidence in the US dwindles
The danger, however, is that the rally propels the euro to levels damaging competitiveness. The topic has featured prominently at the ECB’s annual retreat in Sintra, Portugal.
Vice President Luis de Guindos warned that an advance past $1.20 would be problematic.
The currency has averaged at $1.1829 since it was introduced in 1999, and traded just below that level on Tuesday. Bundesbank President Joachim Nagel used that argument to play down any concerns.
Bloomberg 1 July 2025
If experience over the last decade holds true, a too-strong euro is the last thing the euro area needs.
Former European Central Bank President Mario Draghi always tried to avoid mentioning currency strength but was forced to address it in 2014,
2017
and again in 2018.
However, it's his most recent foreboding intervention on the "Future of European Competitiveness" that's most relevant now.
Europe Gets a ‘Severe’ Diagnosis From Doctor Draghi
So while the euro is currently set fair, it will require the fiscal cavalry to really boost its domestic demand.
Bloomberg 1 July 2025
När nästa recession väl kommer, så är risken stor att politiken har uttömt sina motmedel.
Det finns dock ett medel kvar som inte prövats – så kallade helikopterpengar.
Klas Eklund, Fokus Februari 29, 2016, nr 08
https://internetional.se/helicoptercavalry.htm
Helikoptrarna närmar sig
https://englundmacro.blogspot.com/2020/03/helikoptrarna-narmar-sig.html
EU Cavalry arrives in time
https://englundmacro.blogspot.com/2012/02/eus-bost.html
Euron spricker när dollarn faller
Rolf Englund, Nya Wermlands-Tidningen 8/1 2001
https://www.internetional.se/emurolf.html#sprickerfaller
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