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ECB Keeps Rates Unchanged As Trade-Weighted Euro Soars
As expected by most, the ECB just announced its three key interest rates unchanged, meaning the surge in the trade- weighted EUR will continue to weigh on European exports.
From the ECB:
7 February 2013 - Monetary policy decisions
At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.75%, 1.50% and 0.00% respectively.
The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. CET today.
Today's lack of action by the ECB means that Europe's GDP will start seeing cuts as a result of a soaring trade-weighted EUR as noted below:
From Bloomberg:
The euro has climbed 11 percent on a trade-weighted basis since Mario Dragi pledged on July 26 to do whatever it takes to preserve the currency. A 10 percent gain against a basket of trading partners reduces euro-area GDP by 0.5 percentage point in the first year, according to Elga Bartsch, chief European economist at Morgan Stanley in London
That's 0.5% the Eurozone can't afford to lose.
Nexd up: Drahi's press conference at 8:30am in which he resembles Greenspan in his meandering and meaningless rhetoric ever more.
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Good call Amigos.....I would have done the same thing.
me too - and it was as expected
Poor Hollande; the french lost their friendly football game yesterday against Germany; the first loss since 1982!
And, prior to attending the match in France, Merkel rebuffed Hollande's spiel in front of Euro Parliament where he had said : Its only logical that Europe protects its money in the currency war game by supporting a move to weaken the Euro as our exports suffer with a strong Euro... by saying : we in Germany are very happy with a strong euro. It has always been our position!
I don't know if she really meant it or just said it to piss off Hollande. Anyways, the french football team lost 2-1 and the Euro has gone climbing up again.
The roller coaster plays on!
Might have had something to do with the football players moving out of France to avoid the latest round of tax increases.
eh, imho it's all part of the push the German liberals are organizing together with all the other German parties to finally convince France that they have to "restructure" the French labour market laws
Hollande's position is the age-old socialist one in this: since the ECB opened the gates for the crisis, it makes sense to do further so and "help" the economy further
aka MOAR is MOAR
>we in Germany are very happy with a strong euro. It has always been our position!
"It has always been our position...in public, which is why we absolutely can't afford to have Greece, Spain, or Italy leave the EU to make sure the sombitch is under valued".
There. Fixed it for ya.
which of those three countries "want to leave the EU" exactly? which is anyway not the same as leaving the other club, the one with the EUR? which leads me to ask the same question for that one, too?
Pedantic much? Let me ask you something, do you honestly think the Greeks are going to stick with another 25 - 30% devaluation of their wages and real economy? Wouldn't it have been easier to leave the Euro and devalue last year? Two years ago? And practically, most legal scholars who have worked on the issue say that there is virtually no way for Greece to leave the Euro but remain in the EU. Anyway, thank you for the dickish and hostile question.
"Draghi's press conference at 8:30am in which he resembles Greenspan in his meandering and meaningless rhetoric ever more"
LOL - meaning he is not transparent?
"not transparent" being the best criticism to appeal to consumer logic, of course
I remember a lot of people wondering how powerful Draghi's little comment of "whatever it takes" was
If you apply citizen logic to that it makes sense that a national bank's federation chief tries to measure his words - to the point of not saying more than necessary
let the politicians make their market moving comments, a proper national banker should strive for stability
limit order in to short the euro at 1.3710
The USD thanks you.
How nice of you! conciddering the USD pays for it all...
I thought he was prepared to do whatever it takes?
Can't wait to hear what actually will increase GDP...
maybe more europrinting?
Well, the currency went up 11% in USD terms, which means GDP went up about 10%.
Isn't that a great result?
I like to think the dollar went down 11% tot the euro, but whatever :)
or the USD went down 11% and the EUR did not follow suit
and of course this 11% will in theory find it's way in the US stock markets - hurray! hurray!
Wow, the fraud masters on that side of the Atlantic are as deceptive as those on this side. "Games continue" should have been the headline!
Ahhh the inverted world of FIAT, where "more" is "less". Weakness in relative exchange rate terms, STRONG in emerging market wealth reserve. The game's afoot Watson. Look, more clues over here ...
Please don't insult Draghi by comparing him to that bullshit artist Greenscam. Oh, wait...