Why is the Damned Euro So Damn Strong?ARTICLE December 2, 2011
by Paul Horne, Independent Market Economist
Why IS the euro so strong against the dollar when bond markets have it on its death bed?
Since the onset of the crisis in Greece in late 2009, foreign exchange-traders have been forecasting that the euro will sink to dollar parity before becoming extinct. This expectation is considered “common sense” among most Americans, including those watching the euro’s fluctuations with a view to their costs for vacations or alimony or investments from dollar accounts.
Despite all these expectations, the fact is that the euro has maintained an average value of $1.36 since late 2009 when the euro crisis began. What is sustaining the euro at this level against the dollar?Download