What's Wrong With This ECB Forecast

Tyler Durden's picture

While Mario Draghi will never openly admit it, the whole purpose of today's ECB charade, in addition to reflating asset prices to record-er highs of course, is to push the EUR lower. Which is why some are scratching their heads why, at the same time as Draghi stopped just short of firing the monetary bazooka at the artificial European currency (even if he did precisely as he was expected), the ECB also released monetary forecasts which were a tad conflicting.

To wit:

Bilateral exchange rates are assumed to remain unchanged over the projection horizon at the average levels prevailing in the two-week period ending on the cut-off date of 14 May 2014. This implies an exchange rate of USD 1.38 per euro between 2014 and 2016, which is 4.2% higher than in 2013. Over the projection horizon, the effective exchange rate of the euro is assumed to be 2.7% stronger than in 2013.

In other words, previously the ECB forecast 1.36. Now if forecasts 1.38.


Gotta love that Frankfurt forward guidance.


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sudden Debt's picture

flip the difference and add it to the GDP so the debt looks smaller so we can borrow more money!!





robochess's picture


prains's picture

In Yellgium, they say bend over and tie your shoe for about ten minutes

NotApplicable's picture

Well Tyler, they obviously used the wrong month's seasonal adjustment factor.

Seasmoke's picture

I have a headache. And I have my physical Gold. 

SpanishGoop's picture

The secret plan B.


oklaboy's picture

must be figuring in hookers and blow...

Obamanism's picture

If you like Positve Interest rates

You can Keep your positive Interest rates.

Dr. Engali's picture

He knows that whatever step he takes the BernakenYellen will one up him. If they catch on to the Belgium proxy the fed can move on to the Ukraine.

dressguard's picture

Thanks to the ECB the gold bull is back!!!

deflator's picture

ECB could have done MOAR to maintain targeted depreciation rate with USD. Is that the message, that ECB has room for MOAR "if necessary"?

Of course MOAR will be necessary because ECB will always be behind the curve of FED mandated currency depreciation.

Emergency Ward's picture

I never trust exchange-rate forecasts that are only carried out two decimal places.

highly debtful's picture

Riddle me this: everyone is raping their own currency into oblivion, and yet at the same time they all want us to keep trusting fiat money and the sanctity of our bank deposits: I'm supposed to continue to put my faith in the euro, BNP Paribas, KBC and Belfius, whereas you guys are supposed to believe the dollar will remain the world reserve currency until the sun swells into a red dwarf, while Goldman Sachs is doing God's work and is as sound as a penny (come to think of it, that might be very well be the case one day)?   

Notsobadwlad's picture

Who controls the exchange rate? Is it some imperceptable market force or is it the banks and central banks in particular?

Right. The banks. They control rate and price and so if the number is wrong then it is intentionally wrong. It is not that they are not in tune with reality. They (at least think that they) create reality ... and rates are adjusted accordingly.

Debeachesand Jerseyshores's picture

Once everbody figures out that moves by the ECB is just "smoke and mirrors", the EurTards will dream up some other BS.....

hangemhigh77's picture

In Jersey they say "what exit"?

hangemhigh77's picture

The next move is the BANKSTERS will outlaw rope.