Euro

European Central Bank QE Is Masking Eurozone Struggles

European Central Bank QE

The European Central Bank quantitative easing regime is officially in full swing.

European Central Bank data released last Friday indicated as much. The sovereign bond-buying program began March 9. And in just two weeks, Eurozone central banks had already purchased 26.3 billion euros. This is all while economic indicators seem to point toward a recovery.

This market optimism is all unwarranted. Here's why the Eurozone is still in trouble, and why QE won't fix anything...

Euro-Dollar Parity Gets Closer as Euro Sinks to 12-Year Low

euro dollar parity

The march to euro-dollar parity continued today (Wednesday) as the currency slipped below $1.06 for the first time since 2003.

In January, our 2015 euro forecast saw euro-dollar parity happening sometime in the first half of 2016.

It's fallen 12.6% in 2015. And it's still got a ways to go...

Google's New "Euro Plan" Could Boost Shares by 50%
(or More)

Puzzle 200px

Google Inc.'s (Nasdaq: GOOG) plan to merge its European operations might look like a defensive pullback, but it's really a potential buying opportunity. In fact, Money Morning's Defense and Tech Specialist Michael Robinson thinks the stock could soar 50% over the next three and a half years.

The search giant said on February 25 that it would merge its two European divisions.

Draghi's Pain Can Be Your Gain with This $10 Stock

Draghi

Many investors expect "Super" Mario Draghi's recently announced 1.2 trillion euro stimulus program to produce big market gains just like the Fed's QE did here in the United States.

What they're missing is that not all companies are going to benefit. In fact, the vast majority won't.

How do you know if the one you want to buy is one of 'em?

...because it's tied into one or more of the six unstoppable trends we're following.

That's what we're going to talk about today...

ECB QE Points to These Profit Plays

ECB QE

ECB QE and EU LTRO for Dummies: As soon as you read this explanation, comprehensible to even the dumbest of the dumb, you'll be set to trade initials.

We made 382% gains trading these initials. And there's more: Once we closed out, we re-entered.. and now we're up 180%.

Here's how to make real, easy money from the world's biggest economic experiment...

What Greek Election Results Mean for the Euro in 2015

What greek election results mean for the euro

The Greek election results have ushered in a new political era for Greece.

And this will certainly impact the euro in 2015.

Here's what the Syriza victory means for the euro as a whole, and how you can play it for gains in 2015...

The "Gnomes of Zürich" Created a Financial Nightmare

Stock market futures On Halloween, the Bank of Japan unleashed a massive quantitative easing program that included the purchase of bonds, stocks and ETFs in a desperate attempt to revive the terminally ill Japanese economy. This coincided with the end of the Federal Reserve's third round of QE in October. At that point, the world entered the terminal […]

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Swiss National Bank vs. ECB: The Best and Worst of Central Banking

swiss national bank

The Swiss National Bank's three-year old franc-euro peg is no longer.

Yesterday (Thursday), the Swiss National Bank decoupled its fixed 1.2 CHF/€ exchange rate. This was on expectations that the European Central Bank will announce a quantitative easing policy in next week's meeting.

Here's why the Swiss abandoned the peg...

Today in Eurozone Financial News: The Euro's Nine-Year Low

financial news

Eurozone Financial News: The euro is falling - so much so that it's trading at lows not seen since 2006.

It did gain somewhat as the day wore on. But in the morning, the euro hit a low of $1.1885.

Here's what has been moving the euro today...

Why the U.S. Dollar Is Rising, and Why It's Going to Fall

why the u.s. dollar is rising

Make no mistake about the U.S. dollar's recent strength; the long-term health of the world's reserve currency is still as precarious as it ever was despite the recent pick-me-ups it's received in foreign exchange markets.

Here’s why the U.S. dollar is rising now – but won’t be forever…

Silver Prices This Week Fall Further, but Price Gains Are on the Horizon

short the euro

The news of rate cuts from the European Central Bank (ECB) is giving traders more reason to short the euro.

This looks like a further step toward large-scale quantitative easing in the Eurozone, and the euro is likely to see devaluation at the hands of inflationary cues from the ECB.

Here’s how you should play this currency…

The Biggest Takeaway from the European Central Bank Rate Cut? Short the Euro

short the euro

The news of rate cuts from the European Central Bank (ECB) is giving traders more reason to short the euro.

This looks like a further step toward large-scale quantitative easing in the Eurozone, and the euro is likely to see devaluation at the hands of inflationary cues from the ECB.

Here’s how you should play this currency…

Why to Short the Euro in 2014

short the euro

The euro is readying for a substantial devaluation at the hands of oncoming monetary and fiscal stimulus.

But don't think the euro bears haven't already thought of that, as the currency has lost 5.3% since its peaks in May.

Here’s why the euro is worth a short, but also why you should wait before you dive in…

Why a Rising Euro is Likely Despite Draghi Comments

Currency Euro symbol

European Central Bank President Mario Draghi warned about excessive euro strength at a press conference today (Thursday) following his announcement that the ECB had left interest rates unchanged, as expected.

In response to a reporter's question on whether there was a currency war in progress, Draghi said, "I think we should have in mind one thing: changes in the exchange rates that we see today are not really deliberate competitive devaluations. They are more the effect of macroeconomic policies that are meant to revamp the economies - for example, very low interest rates, promises to stay low for a very long time.

"However, if these policies produce consequences on the exchange rates that do not reflect the G20 consensus, we will have to discuss this."

Draghi said the exchange rate is not a "policy target" but is "important for growth and price stability," adding, "We certainly want to see whether the appreciation - if sustained - will alter our risk assessment as far as price stability is concerned."

Observers blogging and tweeting from the room where the press conference was being held felt Draghi was being very careful in choosing his words and interpreted this as a sign that he was, in fact, attempting to talk down the euro or at least slow its rise against other major currencies.

Traders immediately sold the euro against the U.S. dollar and against the Japanese yen. The euro is currently trading down about 200 pips against the U.S. dollar and is off more than 150 pips against the Japanese yen.

There is no doubt Draghi succeeded in halting the rise of the euro, at least for today. But if the ECB is serious about putting a lid on the euro's strength, its options are limited.

Because the ECB must take into account the laws and preferences of its constituent national central banks, it would not be easy to intervene in the foreign exchanges market - except in extreme circumstances - or to undertake a competitive expansion of the ECB balance sheet as the Fed and the Bank of Japan are doing.

The ECB could create new credit by purchasing private-sector assets, as the Bank of England and the Bank of Japan have done, but it is unclear how the conservative Germans would react to such a plan.

Or Draghi could just keep talking.

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Eurozone Debt Crisis: Why Cyprus Needed the Fifth Bailout

U.S. stocks were rattled Monday as two more countries asked for bailout packages in the ongoing Eurozone debt crisis.

Shortly after word came that Spain had formally requested a bailout package for its ailing banks, Cyprus chimed in and also asked for aid.

The Mediterranean country has become the fifth Eurozone nation to hold out its hand for an international rescue. While the smallest of the bunch to seek relief, Cyprus highlights the European Union's increasingly stressed resources as it wrestles with weakening economic conditions.

The aid request followed Fitch's downgrade Monday of the island's stressed banks to "junk" status. The credit cut means the country has lost it investment status with the trio of the largest and most influential rating agencies.

Fitch said in a statement, "Cypriot banks will require substantial injections of capital in order to secure confidence in their financial viability."

Cyprus, saddled with Greek private sector debt, could need as much as 10 billion euros ($12 billion) in bailout funds.

"Classic contagion, "BBC's chief economics correspondent Hugh Pym said of Cyprus' troubles.

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