Re:The euro has tumbled near parity to the US dollar
by howmayiannoyyou on Monday July 11, 2022 @05:21PM
(#32062057)
Why:
- Germany facing record deficit spending to offset energy shortages due to Ukraine war.
- Massive US-denominated debt in Europe, requiring USD to service and/or payoff at a time when the US has raised interest rates and decreases liquidity. This is a huge reversion of a bubble that has enlarged for over a decade.
- Greatly decreased USD revenue from exports to US due to inflation, adjusting EURO downward in a somewhat autonomous rebalancing (meaning not necessarily central bank led).
- Inflation over imports of food, energy & other goods settled in dollars.
- Fissures in the EU over German and Hungarian reluctance to participate meaningfully in defense of Ukraine as a proxy for defense of countries like Poland and Lithuania.
- Germany facing record deficit spending to offset energy shortages due to Ukraine war.
- Massive US-denominated debt in Europe, requiring USD to service and/or payoff at a time when the US has raised interest rates and decreases liquidity. This is a huge reversion of a bubble that has enlarged for over a decade.
- Greatly decreased USD revenue from exports to US due to inflation, adjusting EURO downward in a somewhat autonomous rebalancing (meaning not necessarily central bank led).
- Inflation over imports of food, energy & other goods settled in dollars.
- Fissures in the EU over German and Hungarian reluctance to participate meaningfully in defense of Ukraine as a proxy for defense of countries like Poland and Lithuania.
- Risk premiums across the board.