They dig their own graves and fall inside. All these Merkels & Cos, all these Samaras & Friends and all these international media who have adopted Antonis Samaras’ stance that a left-wing SYRIZa government will push Greece out of the eurozone. The euro plunged into a nine-year low on Monday apparently after Germany said over the weekend that it was prepared for a Grexit.
“The euro fell to $1.18605 in early Asian trading on Monday, its weakest level since March 2006. In early European trade it was at $1.1964, down 0.3 per cent from late U.S. trade on Friday.”
“The euro slumped to a nine-year low on Monday as investors bet that the prospect of inflation across the region turning negative and mounting political uncertainty in Greece will force the European Central Bank to unleash quantitative easing.
European shares were volatile, initially falling sharply before rebounding into positive territory within an hour of the open as investors digested the implications of the weak euro and yet another hefty slide in oil to a 5-1/2 year low.
The euro fell to $1.18605 in early Asian trading on Monday, its weakest level since March 2006. In early European trade it was at $1.1964, down 0.3 per cent from late U.S. trade on Friday.
Investors betting that the ECB will take the plunge and open up a bond-buying program like the U.S., UK and Japanese central banks have done were emboldened by an interview ECB president Mario Draghi gave to German financial daily Handelsblatt on Friday.” (full article Globe & Mail)
Athens Stock Exchange could not protect itself and Monday’s session opened with losses. As of 1:50 pm local time, losses are at -4.26% and the General Index is at 800,65 units and at high risk to fall below the “psychological” threshold of 800.
PS Let them play their games and wait to see euro committing suicide on January 26th 2015, when markets will open a day after elections in Greece.
The slide has more to do with investors anticipating the European Central Bank “acting” to “stimulate” the economy. Mario Draghi confirmed the bank was stepping up preparations for a QE programme.
This, intererstingly, will be announced just before the Greek election. OR ….. can the tap be turned off and on depending on election outcomes.
The best analysis of QE (Quantitive Leasing) for your readers can be found here http://www.pieria.co.uk/articles/the_black_hole_theory_of_the_eurozoe
The last two paragraphs are not for the faint-hearted.
thanks
Yes, the Euro has come down from lofty hights which at one time were as high as 1,60. But still: one has to bear in mind that the exchange rate at issuance was 1,18. Thus, the Euro is now back to its original issuance rate. After its issuance, the Euro first declined to below 0,90 and I don’t recall that the Eurozone collapsed because of that. I don’t think the Eurozone will ever fall apart because the Euro declines against the USD. If the Eurozone does fall apart, it will be because it ceases to be functioning due to the Euro.
I receive regular bulletins on exchange rates from a company in UK. These are the rates on 23 December and 5 January. I don’t even begin to be able to find my way round all the financial gobbledegook but they don’t look that much different to me.
23 December 2014 1.19 €/$ 1.53 £/$ 1.27 £/€
5 January 2015 1.22 1.55 1.27