The EUR/USD has been tumbling down since April 2014 when it started it’s longterm downward trend. It has dropped from the level of almost 1.40 to a lowest level since 2003 reaching 1.0460 in March 2015. This is a drop of over 33%!
Even though the crisis of 2007/2008 originated in the US mortgage and derivative assets markets it quickly spread through the interconnection of many financial institutions and hit the Eurozone economy quiet hard. After the financial crisis of 2007/2008 the Eurozone was hit by the sovereign debt crisis at the end of 2009. Several countries had to be bailed out in order to fulfill their debt obligations and not to have a detrimental effect on the European economy which was just coming out of the previous crisis.
The massive selloff of the euro which took place in 2014 was due partly to the deteriorating economic situation in the Eurozone or to be more precise the stagnation and nonimprovement of the economic situation. However it wasn’t the only reason. This depreciation was further fueled by the decisions of the Fed to scale back and finally bring to a halt in October 2014 the longlasting quan…