Euro Risk
02/05/2013 | | currency appreciation, ECB, euro zone, Graphsandlaughs, graphsandlaughs llc, Inflation, Spain, US Dollar
Despite the euro zone being in recession, the euro is dramatically rising against the US dollar, from $1.20/euro in July to $1.36 today. Why, because massive European Central Bank (ECB) action prevented Spain from collapsing, and the ECB is fast becoming an inflation hawk and has thus started to shrink its balance sheet, until, of course, the southern European countries go into recession and the ECB again loosens monetary policy.