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

To: Zeev Hed who wrote (49874)	5/9/2000 8:23:00 AM
From: pater tenebrarum	Read Replies (1) \| Respond to of 99985

Zeev, i agree. as things stand at the moment, the Euro-zone is far from being an ideal common currency area. in essence there are two possibilities: either the need to keep the Euro alive forces the European political leaders to enact the necessary structural reforms, or failing that the Euro will fall apart again. knowing the current sorry state of political leadership in Europe, i vote for b). and that would be a big blow to the EU's aspirations. if the Union is to succeed, the Euro must be made to succeed. right now it looks more and more like a currency crisis. that said, bullish sentiment on the dollar vs. the Euro is extraordinarily high. due to the interest rate differential, US corporations have borrowed heavily in Euros. eventually the flow of interest payments on these borrowings alone should put a floor under the Euro. the various carry trades that have been put on could easily go the way of the Yen eventually. in view of these facts, it is probably best for those inclined to make bets on currencies to play the D-Mark. if the Euro should fall apart it will likely rise dramatically. if the Euro succeeds, the D-Mark is tracking it anyway. regards, hb