Eurozone….Global Exposure



The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.” Rudiger Dornbusch

As I´m writing, the Euro has surpassed 1.4650, after a 200 pips rally on Friday, triggered by the combination of the release the next tranche of bail-out payments to Greece and disappointing US Jobs Report – A rise in the unemployment rate from 9.0% to 9.1% from April and 54,000 rise in jobs followed a 232,000 gain in April and was below the 165,000 median increase forecast by economists in a Bloomberg News survey – which might have worked as catalysts to affect the declyne of the US Dollar in favor of the european currency.

Regardless of the short term moves, two recent articles from the BBC- Eurozone woes are US woes– and Der Spiegel –The Hidden Costs of saving the Euro– point out some of the complex underlying relationships within the global financial system (Deja Vú?) which suggest that the short term move has little to do with the underlying fundamentals of the situation, at least for now.


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