Well, despite all the expectation, ECB PResident did an early move by lowering again the interest rate. There was yet no reason but mario has just one idea in mind which is inflation. Therefore because he can't get inflation and market is in a deflation scenario, he has decided to provoke the inflation.
The ultimate objective is to reach 2% of inflation. Because market in not in a situation to increase the prices of goods, Mario will make the necessary to do so.
EUROZONE is a market where most of the goods are imported from third countries and these products are imported in USD currency. Therefore if you d evaluate the price of EUR against USD automaticaly the prices inside the EUROZONE will increase and Mario will reach its target. This target will be a virtual achievement, not based on micro economic performance and market based performance but rather based on ECB intervention.
To reach his goal, Mario may foresee a EURUSD parity which may be around 1.10-1.15 .
The price is bellow 1.30. and it won't reach any further above 1.33 and i would say 1.31
With FED's increasing its interest rate on 1Q15 or 2Q15, EURO say well go bellow 1.20
The ultimate objective is to reach 2% of inflation. Because market in not in a situation to increase the prices of goods, Mario will make the necessary to do so.
EUROZONE is a market where most of the goods are imported from third countries and these products are imported in USD currency. Therefore if you d evaluate the price of EUR against USD automaticaly the prices inside the EUROZONE will increase and Mario will reach its target. This target will be a virtual achievement, not based on micro economic performance and market based performance but rather based on ECB intervention.
To reach his goal, Mario may foresee a EURUSD parity which may be around 1.10-1.15 .
The price is bellow 1.30. and it won't reach any further above 1.33 and i would say 1.31
With FED's increasing its interest rate on 1Q15 or 2Q15, EURO say well go bellow 1.20
