Reuters (April 23)
“For investors, the key question is whether the ECB’s carefully calibrated exit plan from its ultra easy policy could be scuppered by trade tensions, especially if the dispute between the United States and China sucks in the euro zone. The ECB would have to alter its march towards a more normal policy stance if growing risks from protectionism, exchange rates or market swings end up depressing inflation.”
Tags: China, ECB, Euro zone, Exchange rates, Exit plan, Inflation, Investors, Market swings, Protectionism, Risks, Trade tensions, U.S.
The Economist (July 23)
With bank stress tests complete in Europe, Japan breathed a sigh of relief. Perhaps the euro would strengthen and the yen finally weaken. The Economist suggests otherwise. Based on the Big Mac index, the magazine believes the Euro is overvalued by 14% versus the dollar, while the yen is slightly undervalued and should rise to 85.7 versus the dollar. More extreme still, the yuan appears undervalued by 48% versus the dollar. The Big Mac index is based on the concept that wherever you are, standard goods like a burger should cost the same amount.
Tags: Big Mac index, euro, Exchange rates, Yen
