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The pernicious effects of an overvalued euro

MADRID | By Francisco López | While Mr. Draghi simply says that the ECB “is closely following the evolution of the exchange rate due to its impact on the price stability,” other international bodies such as the IMF, the OECD, the European Commission and most of the Eurozone’s countries (with the exception of Germany and its allies) demand the banking authority to take immediate action.

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A too much strong euro for such a weak euro zone

MADRID | By Francisco López | The climbing of euro against U.S. dollar is increasingly worrying market strategists as it can affect negatively prices and loss of competitiviness in the euro zone. Conversely to the ECB, which has decided not to intervene exchange rate. “It is out of our mandate,” Draghi assured last Thursday, “unless it damages prices’ stability expectations or economy growth.”

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The Threats of Emerging Countries For the Euro

MADRID | By Luis Arroyo | The appreciation of the euro, in a deflationary context as the current one, may be the last push so as to cross the ECB’s red line and reach a Japanese style deflation. Macroeconomic variables don’t encourage optimism, especially because inflation in the euro zone is getting closer and closer to the ECB’s zero red line.

Mortal Disagreement In and For the Euro

MADRID | By Miguel Navascués | There is a harsh disagreement in the euro zone: when Mario Draghi tries to do something, he finds the opposition of Germany and its allies. It seems obvious that Europe won’t get out of the hole with such travel companions.

In a Glimpse- PMI and Central Bank Actions

SAO PAULO | By Marcus Nunes | Markit´s PMI survey is a favorite of central banks and financial institutions. The panel below shows both the global (comprised of 32 countries) and the Eurozone and Japan PMI´s. Trichet´s rate increase ‘folly’ of April and June 2011 as well as Draghi´s “ECB will do whatever it takes” of July 2012 are marked. So is the “Abe effect” in Japan.

Is that a euro comeback I see before me?

MADRID | By Luis Arroyo | Those who have already celebrated the euro comeback might be deluding themselves: investor confidence has changed gear because European peripheral risk at this point looks safer than some emerging economies’.