The euro’s rebound in the first half of 2017 came as a major surprise for most market participants. The consensus was a further weakening of the euro. However, as we know today, the outcome differed. Hereafter a review and outlook from a macro perspective.
The economy is humming, sentiment decidedly is upbeat and inflation rates stopped flatlining a while ago. So everything all right, ready for a bracing economic takeoff? No, not at all. Monetary policy remains in full crisis mode just as the US Fed attempts to normalize its monetary policy – a colossal task in itself.
In recent weeks, currency markets have seen substantial price movements. But the historically large deviations from purchasing power parity of many currency pairs have not yet been completely resolved. Thus, there are still rewarding opportunities for investors. We take inventory.
The USD declined further in May as vaccination and recovery momentum increased in other economies...» more