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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (18162)	12/9/2004 10:11:30 AM
From: zonder	Respond to of 116555

Well, I do understand where they are coming from re inflation risks. At this point, ECB is just trying to talk down the EUR - they are "not happy with it", etc. If in the near future they see inflation as a problem, they will raise rates. And if EUR/USD gets unbearable, they can always intervene in the market. Interest rate differential is not a big factor in EUR/USD at this point, imho - although Fed funds and ECB repo rates are the same, US interest rates were higher than EU rates on 3m, 2yr, 5yr, 10 yr basis, and still EUR appreciated against USD.