They took the euro up mid to late last week on hopes of a deal, they get the deal and--BAM!--the euro tanks.
Matt Franko has been pointing out that many German export firms are still feeling soft demand and thus, there will be the need to cut prices. Certainly the new austerity measures in Greece will add to overall Eurozone weakness over time.
Euro looks to go lower, however, a good dose of patience is requied.
2 comments:
You made a post recently describing strong BMW sale in US.no pressure them to cut prices.you even had evidence of strong BMW sales.
Where is the soft demand story coming from?
http://www.tradingeconomics.com/united-states/exports
http://www.tradingeconomics.com/japan/exports
http://www.tradingeconomics.com/germany/exports
http://www.tradingeconomics.com/china/exports
Exports look overall to be mostly flat to me. Demand shifts around with currency trends mostly as countries compete for market share.
Fraud, capital controls and tax evasion make it so that exports nearly always exceed imports by a few percent, so trade is usually slightly weaker than reported too. Economic theory and national accounting is broken and of limited use when trying analyse trade. Take official statistics with a grain of salt, best we have but not very good.
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