FX:EURUSD   Euro / U.S. Dollar
2
Parity is all the talk amongst the financial and corporate pundits these day's, Everyone from CITI to GOLDMAN is forecasting for the rate to hit 1.00 flat. The deleveraging of 2008 sent the euro and every other global currency plummeting relative to the greenback, Which marked the first wave of king dollar and the deep liquid pools of dollar denominated safe securities i.e (Treasuries). After the bailout's and the implementation of central banks to re liquify the financial system the Eur/Usd traded in a narrow range slowly making lower highs relative to the 2008 inflationary peak. The EURUSD exchange rate remained far to high in this tepid global growth dynamic relative to the rest of the world thus making the euro zone uncompetitive relative to the rest of the global marketplace. The solution was the same, Print money to bring down peripheral yields and reduce risk premia thus creating a weaker euro to promote exports at the expense of domestic importers and savers for that matter. This dynamic is still being played out and the central monetary authorities got what they wanted a weaker euro and lower yields. The question remains as to how low the EUR can go. In my opinion we are nearing a reversal, yet I will being waiting for a considerable rally before i consider adding exposure to EUR exchange rates.

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