Re: Euro-Dollar Parity

[Sven R Larson <larson@xxxxxx>]

If the current political turmoil in Germany does not escalate, maybe the
most serious phase of the euro's crisis is over (the Austrian issue
disregarded). But it sure looks like more is coming - the entire
leadership of the Christian Democratic Party is under criminal
investigation on rather ugly funny money charges. A couple of them have
developed close connections with the incumbent social democratic
government, so this threatens to contaminate the entire political
establishment. My guess: if fmr chancellor Kohl does not have to stand
trial, I guess this will slowly fade away. If he's charged (among other
things, with tax evasion) then we have to adjust our expectations to the
worse.


/srl


"ÁÎ×Ó¹â HenryC.K.Liu ¹ù¤l¥ú" wrote:
>
> Yesterday, the euro approached parity with the dollar.
> Analysts traced the upward movement to optimism generated by the German
> tax reform proposal.
> Japan's heightened troubles also presaged the yen's fall.
> Also, Summer's loose lips on the Treasury's buyback strategy the day
> before in the corridors of Congress, about "using the entire yield
> curve" has caused whipsplash for bond traders.
> This revived snipping at Summers' ability to assuage the market as
> compared to Rubin who came from Wall Street and a bond trade par
> excellent.  The concern on Summers' ability to continue Rubin's strong
> dollar policy has yet to be put to bed.
>
> The last few days has put a damper on the wealth effect of bond traders
> who might have regurgitated their entire bonus take for 1999.
>
> Henry C.K. Liu

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Sven R Larson
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