When neo-mercantilism is the model, then currency devaluation bestows competitive advantage in trade, and currency appreciation undercuts exports upsetting the business plan.
Focusing on the euro, ECB President Draghi pointed to large capital outflows out of Russia of about $160bn. Some of this may have gone into euro denominated investment, increasing unwanted upward pressure on the currency.Macrobits by Marshall Auerback
The ECB Agrees With France: The Euro Is Too High
Marshall Auerback
4 comments:
Better lower those interest rates!
Even better, consider negative rates... that should really help things get going over there.
"Focusing on the euro, ECB President Draghi pointed to large capital outflows out of Russia of about $160bn. Some of this may have gone into euro denominated investment, increasing unwanted upward pressure on the currency."
Of course it couldn't have been due to the new round of Euro austerity...
According to local banks there has been a significant inflow of Russian funds into Brazil in recent weeks.
Seems quite logical, taking into account the double digit overnight rates now prevailing here.
The EU/EMU is in a round room desperately searching for a corner.
Post a Comment