TRIMBROKER (TRIMBROKER)
Currencies  |  February 11, 2013 14:56:17

All they want a weak currency


iPoint.cz This week is not very abundant in the publication, and the publication of GDP ration nerátame Thursdays (Eurozone, Japan, Germany, the Czech Republic, Hungary ..) and data from industry, Japan, EU and USA. But they would be full of politics, the principle Eurogroup, ECOFIN tomorrow, Thursday will meet G20 but still wants to issue a declaration previously behold G7. Almost certainly will be more, but one resonates again and again. Foreign Exchange.

Yes, the financial crisis may be by the ECB and Brussels ended, len th economy is still somehow weak and increasingly weaker (although there have honestly planned growth in the next year or the one after it).Stimulus packages do not work too (only support narrow group of selected natural or legal persons) and doing more debt than profit. Monetary policy produces a lot of paper-money, but not a lot of jobs. Now we will do as economic growth (which is more important than anything else in the universe)? The private sector spends higher taxes and the threat of loss of job security (threat of loss firm orders), the public sector can not no more lavish, and who has thus purloin growth? No export yet. But, as to increase our competitiveness? Reducing costs (including salaries) or reducing the exchange rate. First, it is very painful, the other at first sight problems. The rich menu So we choose the second option. Voters earlier notice that it does not work like that abroad buys less and less.

Unsurprisingly, for example, that the weaker euro calls mainly Italy and France and Germany, while it is not larger exporter. Germany, and should mark, according to Morgan Stanley analysis would cost 1.53 USD. Euro 1.34 is therefore in order. A Germany taken as the current euro exchange rate equilibrium. French franc, however, cost $ 1.23, so the rate of 1.34 it is not as good. In France, the layoffs and wage reductions taboos are substantial social dirt. It is therefore necessary to do something with the euro. Of course, it can not call it a monetary war, but competitive devaluations. French President Hollande uregulovať it wants to golly media nepísali been writing irresponsible and politically correct.

The eurozone is thus adds to Japan, where a rate is USD / JPY December and the whole theme of the course politizácia still persists. Japan, however, as always, already Ahead and therefore it tells not only about whether it is too strong or JPY overstated, but also on equal konkrétom želanom kurze and about whether declining fast enough and whether, should not descend slowly. Anyway 15% weakening of USD against JPY dvihlo importérov orders from the U.S. and the OECD expects that if the only neposilní from current levels, as Japan GDP could increase by 2 3%. Huge success and the Japanese already nečakajú and speak about where should be traded Japanese NIKKEI index. Of course higher than today.

Britain and its central bank will have a new governor from summer Carney. A few days ago Carney told Parliament that uses all available tools to revive British economy. Including the export sector.

All developed countries are in the WTO, and so are the import and export tariffs or duties unthinkable. But when Japan sees GDP growth through slabšiemu JPY, this recipe everyone will want to repeat. Because they all have the same problem of huge debt, stagnant economy and high unemployment. That G7 wants attenuate the risk of currency wars can very easily relate with the fact that the last thing the U.S. needs now is to make up for the club snažiacich countries languish against the USD added for China and Japan also Eurozone, UK and potentially other countries.Canada already missing flax and complete G7 + China would argue that only about where it should be the exchange rate. This situation illustrates the flax growing political quandary peaks, fixing the economy crumbles in your hands and stimulus-functioning for decades suddenly not working.

Sentiment is from the beginning of the week, especially for commodities negatively. Cereals already sunk below sample data minulotýždňového WASD, now we see the massive slump precious metal that follows even oil. U.S. stocks are falling only slowly and the euro is even in pluse.

The reason why the U.S. is related to shares with a power Dari USD. Commercial balance deficit is the lowest recorded in the last three years. And thanks to the export-about 10% above the spikes from under the crisis, and importing less. The outcome was so good that it will be possible for 4Q2012 GDP revised up and not negative.The last thing the U.S. needs now is a strong USD ... G7 will need to somehow handle.

U.S. stocks did so, a new top and short hesitation meant a larger correction. But still they are not counted cliff fiscal risks that threaten higher taxes linked. Although stocks collected profits, who hold the level of 1512.50 The growth outlook. We prefer, however, a decrease in the band 1505/1510, because the mood is nevertheless worse and U.S. data will be available until the end of the week.

Author: Thomas Swimmer | TRIM Broker, as | Trading on exchanges TRIM Broker


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