Re: Back to the well once more...long dollar
One thing to consider in the context of the Euro is that the member states are all entering very different stages in the business cycle, have rapidly diverging domestic economic conditions especially as regards inflation and yet the Euro CB must adopt a monetary policy that keeps all member states happy.
What makes the Euro different to other currencies is that it is much much more vulnerable to political collapse than other currencies because it is a political creation. How you price this is into trades and positions I am uncertain, but my instinct is that the risks I have mentioned above are not in general fully accounted for in currency markets.
|