No matter how we look at it, the Euro is headed for parity or near to it against the USD in 2017. Greece festering economic problems is not going away without more bailouts…the 3rd one so far…and in the words of Greece gov spokesman Dimitris Tzanakopoulos, “Our aim continues to be an agreement with not even a euro more of additional measures.” The Netherlands, France, and Germany will be holding their elections and it looks like there will change of guards which will not be good for Investors’ confidence. Italy too might possibly hold early election and only President Sergio Mattarella can dissolve the parliament but he’s not too excited about it. For one thing, calling for early elections would expose Italy to unnecessary uncertainty ahead of the G7 meeting in Sicily in May. Government bonds from the Eurozone will be carefully followed by Investors who will dump them upon any hints of uncertainties which, in that case, will be very bad for a lot of European banks who are holding their respective government’s bonds. I believe the EUR/USD will be in for a hard time in 2017 and so will take shorts on any meaningful rises.
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