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Tuesday, 29 September 2015

EUR/USD: believe what you see

Most commentators continue to expect the Euro to decline against the US Dollar -and still predict parity before year end. I, however, believe what I see.

I see my country, Ireland's, exports booming and tourists pouring in, partly because the low Euro makes our prices appear very low to those with Sterling or Dollars. In other words, Euro is undervalued and must rise, no matter how Ireland and, more importantly, the ECB, would want to keep it down.

The chart shows that an upward trend began around 13 Mar 2015. Still at a low slope, an acceleration of the uptrend is indicated. Last week's ECB meeting caused a dip, but the ECB can't, in fact, prevent the inevitable. A rise in American interest rates could bolster the Dollar - but is that not on the long finger?

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