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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (46799)	4/16/2000 7:31:00 PM
From: Crimson Ghost	Read Replies (1) \| Respond to of 99985

Top Brookings economist sees much better times ahead for the Euro: The next major move in the currency markets is likely to be a substantial appreciation of the euro. It will probably take place over the next six to twelve months. There are four major reasons: the substantial underlying undervaluation of the euro; a focus on the euro during the next leg of the fall in the dollar that is inevitable due to America's huge and growing current account deficit; the beginning of a substantial portfolio shift into the euro as it asserts a major role in international finance; and a pickup in European growth coupled with an American slowdown. There is a possibility that the rise of the euro could trigger, or be part of, a generalized decline in the exchange rate of the dollar. That fall in the dollar could in turn push up US inflation and interest rates, thereby drive down the stock market, and imperil the continued expansion of the American economy. A "soft landing" is more likely than a "hard landing," however, because of both the outlook in the key countries and the high probability of concerted G-7 intervention to dampen any severe impact on the world economy. C. Fred Bergsten Director, Institute for International Economics before the WORLD ECONOMIC FORUM Davos, Switzerland January 28, 2000