Euro Conquers Fiscal Challenge While Dollar Struggles

Filed under: International Markets, Currency

Should U.S. investors become ebullient about dollar strengthening versus the euro in light of the European Union's effort to bail-out deficit-plagued Greece?



Hardly. For one thing, the euro, which has weakened about 7% versus the dollar since January to about $1.3372, is not guaranteed to weaken more against the buck. And the reason is obvious enough: unlike the United States, euro-zone nations can not turn to their nation's central bank to 'crank up the printing presses' and inflate their way out of debt and debt payments. The monetary policy of Greece, Italy, Spain, Portugal, Ireland, Germany, and France etc. is set by a supra-national central bank, the conservative European Central Bank, so don't look for Weimar-style printing of money any time soon.

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Euro Conquers Fiscal Challenge While Dollar Struggles originally appeared on BloggingStocks on Fri, 23 Apr 2010 18:00:00 EST. Please see our terms for use of feeds.

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