Summary
Diverging economic fundamentals and interest rate policies between the European Monetary Union and the United States drove the 25 percent appreciation of the dollar from last May until early March. The fall in the united currency was steeper, though by not much, than the 23 percent collapse of the euro in the summer and fall of 2008 as the financial crisis exploded on the world financial system. In the 40 years since the Bretton Woods fixed rate system ended the dollar has only seen one steeper ascent. In the early 1980s then Federal Reserve Chairman Paul Volker pushed U.S. interest rates to 20 percent in a successful throttling of inflation. The euro equivalent basket fell 60 percent against the dollar, but it took five years. The steepest part of that decline a 33 percent fall took 14 months. The euro’s recovery since the middle of March has more profit taking in it than a change of tenor for the currency. What factors might change the prospects for the euro? Is the Fed’s evident reluctance to hike rate undermining the dollar? Will the slowing U.S. economy force the dollar down? What role will the world economy play in the euro-dollar drama? Join us for a wide ranging discussion of the six month macro outlook for the dollar and the euro.Latest Live Videos
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