Especially cheaper oil relieved the purse of consumers. The energy costs fell by 6.3 percent. The European Central Bank (ECB) looks with concern on this development. She wants to avoid that the prices start to slide: Deflation – ie a decline in prices across the board – could also wages and investments can go down and paralyze the economy
In Greece and Spain, the prices are very steep decline. , With a massive purchase of government bonds, the ECB could take countermeasures. It would thus provide an incentive for banks to sell shares and have more money in return for lending available. Thus, the sluggish economy could boost and ultimately inflation are driven upwards.
euro accelerated decline
The fall of the euro has given the speculation of further cash injections from the ECB and Greece’s exit accelerated out of the monetary union. On the night of Wednesday, the euro fell to $ 1.1853 and was quoted thus no longer the lowest since end of February 2006.
“Should the euro not recover during the week, he could quickly under 1, sag 15 or even $ 1.12, “warned one trader. Both technically and fundamentally the euro was struck. At the height of the debt crisis in May 2010, the important mark of $ 1.1875 had held. The ECB continued on Wednesday afternoon daily reference rate fixed at 1.1831 US dollars to euros.
US interest rate policy can euro weaken
As a key reason for the euro’s weakness is also the prospect of rising interest rates in the United States. The US central bank had closed the floodgates for the now recovering economy last year and could 2015 2007 increase for the first time since the outbreak of the financial crisis interest rates again.
in the euro-zone the other hand, the signs continue on an ultra-loose monetary policy. Also contribute to the falling deeper and deeper into the cellar oil prices. Since mid-June, prices have halved. The market interpret this as a threat to a slide in the euro zone into a permanent deflation, the analyst said Ulrich luminous man of the German Commerzbank. The expected for this year bond purchase program of the ECB should actually be considered long in the exchange rates. “Nevertheless burden falling long-term inflation expectations.”
Looking Forward to an ECB meeting
Last week had ECB chief Mario Draghi told the “Handelsblatt” preparations for a bond purchase program ran in a big way. Many investors believe that the ECB will be presented at its first monetary policy council meeting of the new year on January 22, at least a timetable for the “quantitative easing” (QE).
However, the political developments in Greece is in focus. Indeed, a reduction scheduled for January 25 election, the voters of the State of the unpopular reform policies could teach him a lesson and opt for a different policy. This has triggered a renewed debate about a Greek exit from the monetary union. Many stock traders fear a domino effect in this case
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