Saturday, 14 January 2017

The era of the strong dollar has already come (Part 2)

According to Reuters survey results, the main key European economic parameters, especially inflation and GDP, will remain more or less stable only if the elections do not bring with them different kinds of stress. So, expectations for the eurozone in the first and second quarters of 2017 suggest a 0.4% increase on a quarterly basis, and the average expansion of the regional economy for the year will be about 1.5%. A similar growth is expected in 2018. The inflation target for this year and the next one is 1.5%. This is still below the ECB's 2% planned inflation, but much better than what we have seen in the past few years.
The elections could slow these figures. This in turn will very likely impact on fiscal policy of the European Central Bank and, as a consequence, the rates and the euro situation. This long-term view. And without an analysis of the effects of the upcoming elections, it is clear that the year for the euro will be as difficult as the previous one. The era of the strong dollar has already come, and from where it will come the next support for the dollar will be clear already after 20 January.


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