Growth expectations, and the balance of payments, are more Euro-friendly – SocGen EURUSD Growth TradeBalance Banks
to finance support for energy consumers. This is good for growth and, at the margin, for the currency – if European investors buy local debt instead of foreign debt, that helps the overall balance of payments. This isn’t unadulterated good news, if only because the current account is in deficit, but it’s an improvement. As is the relative shift in direction of ECB and Fed travel, and the shift in relative growth expectations.
“The huge elephant in the room – that a prolonged European gas shortage slows growth and raises inflation far more in Europe than it does in other areas , is just one reason why the Euro’s revival won’t be in a straight line. But we’ll take the positive of an improving balance of payment as what it is – good news at the margin.”Information on these pages contains forward-looking statements that involve risks and uncertainties.
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