To: Investor2 who wrote (26769 ) 6/2/1999 11:06:00 PM From: IQBAL LATIF Respond to
Weak Euro is what French would like for export led demand, it is Germans who are very sensitive to weakening 'Euro', anyway weak Euro will help equity markets, but Germans would not like to maintain parity with US $ and I expect that big intervention is around the corner I see Euro to be maintained at 1.08-1.12 area. A rise in US interest rates will surely put more pressure on Euro, the chances of recovery due to structural problems of economy like unemployment still plague Germany, already the smaller partners are growing strongly like Spain, Portugal, Ireland, GDP growth is in excess of 5% for Germany. We need some badly overdue structural reforms and easing stance in monetary policy. For smaller partners a little tightening may help. It is this contradiction that ECB would need to intervene for. It is a long-term problem and I don't see quick solutions, global currencies are not made in heavens or on back of big reserves. Every stable currency historically is backed by a resolute central bank, ECB, I doubt, has plausible credentials, they miss an asset called political will to take harsh decisions, I Dutch cannot take decisions for a German whose problems are quite at variance with an Irish.
