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The Euro will be the next victim?

 

The Dollar has lost terrain to the Euro during the period of March 2009. This trend was strengthened when Ben Bernanke, the US FED manager announced a massive purchase of state obligations in March. The Euro strengthened towards the Dollar with a single run not seen stronger during the last nine years of currency exchange history. Some experts are of the opinion that this will be a trend that will strengthen in the time to come.

The Dollar has fallen due to the measures the FED is taking, and the focus will shift the closer we get to the next meeting discussing the interest rate in the Central Bank of Europe. There will be an enormous pressure on the Euro during these times. As long as the USA alone makes quantitative measure it will put pressure on the Dollar.

However, it will only be a matter of time before EU has to launch their own measures, and then the pressure will come on the Euro.

Most analysts are of the opinion that the Central Bank of Europe will cut the interest rate with 0.5% down to 1 %  at the upcoming interest meeting on April 2nd.

There is a danger for a currency exchange war to take place where each country will try to weaken the currency rate in order to strengthen their export industries.

Many of the larger currency authorities in the world-are trying to weaken their currencies. For instance this goes for Switzerland, Great Britain, Japan and USA. The EU zone has not done this as of yet, and many analysts speculate whether the time has come for EU to take these measures as well, however others think there will not be any measures in EU like these seen by the other larger currency nations.

The Central Bank of Europe can not by obligations directly from governments, but only through a second hand. However, this can cause problems for the Central bank of Europe if Central Bank of Europe has to take losses on these obligations.

 

Stig Kristoffersen

He has a background as civil engineer and geoscientist. He has worked mainly within the oil and gas industry from the mid 1980s. He has written a few fictional novels as well as being the author of some professional litterature within oil and gas sector, he is now an editor of some web sites.

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