Goldman Sachs: Euro euro-zone economic recovery is actually bad


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Night network, network nightlife Finance YORK April 13 news, European economy in recent months signs of a rebound, the opposite often is less than expected US economic data, the euro extended losses against the US dollar exchange rate remains。Including HSBC (HSBC), some agencies questioned the sustainability of the dollar bull market, from the fundamentals that the market has been pricing。But Goldman Sachs (GS) analyst believes that the European economic recovery against the euro may actually constitute bad。  In general, the economic recovery will lead to higher interest rates, making the country (or region) with respect to the United States spreads rise, thus promoting the country (or region) currency against the US dollar to rise。But Goldman Sachs believes that this logic does not apply to the current euro as the European Central Bank [microblogging] quantitative easing (QE) to suppress the nominal interest rate, breaking the transmission mechanism to promote the growth rebound in the exchange rate to rise under normal circumstances。  In fact, the euro zone economic recovery is actually possible negative euro。  Goldman Sachs said in a report: "In the presence of QE, if (the euro zone) economy rebounded in part from the periphery of national consumption and recovery of the German economy overheating, but rather that the euro may adversely。In this case, the current account balance of the euro area will decline, which weighed on the euro against the dollar。"For some analysts worry the euro has to leave the eurozone interest rate differential with the US level, Goldman Sachs pointed out that Japan's experience in the quantitative easing policy, the nominal interest rate differential has failed, because the interest rates of all maturities, even long-term interest rates values are close to zero, so that the name of spreads very limited operating space。  In this case, "the focus turned to inflation expectations and implied real interest rate differential," Goldman Sachs analyst said the case。  Goldman Sachs expects the euro will continue to fall, expect the euro against the dollar before the end of September fell to 1.02, 2016 before the end of March fell to 0.95。(Shofu compilation)

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