Therefore weaken the euro – Swedish newspaper Svenska Dagbladet

Therefore weaken the euro – Swedish newspaper Svenska Dagbladet

On Monday the euro was trading at its lowest level against the US dollar since March 2006.

The European currency has racheting lately and squeezed among other things, the ECB president Mario Draghi’s statement last week that the European Central Bank is likely to fail in its objective of price stability.

Another source of concern that presses the euro is the information in the German magazine Der Spiegel over the weekend that German Chancellor, Angela Merkel, is ready to allow Greece to leave the single currency.

Elizabeth Kopelman, director of economic analysis at SEB, still believe that the prospects for the euro zone to withstand the rigors if Greece does not remain in monetary cooperation, is much better than a few years ago. She points to the efforts made and done, not least from the ECB.

– From 2010 onwards, the various forms of aid and rescue package in place, she says, exemplifies that Draghi pledged to do everything he can to support the euro zone bond purchases and through other support mechanisms.

“There are anti-EU forces in several countries can gain ground in the event of an exit for Greece.”

Elizabeth Kopelman, head for economic analysis at SEB.

That it is more stable in the euro zone is also due to other former crisis countries, especially Spain and Ireland, now has a much more stable financial footing.

– But if Greece, after a possible election victory for the Left in January, wants to leave the euro zone or if the country is forced to leave the area, given the policies of the new government would bring, it can influence public opinion in other eurozone countries. There are anti-EU forces in several countries can gain ground in the event of an exit for Greece. It will not be quite manageable, says Elizabeth Kopelman.

Nordea’s chief analyst and currency strategist, Torbjorn Isaksson, says to SvD Business to current drama in Greece will not elicit the same drama as for some years ago.

– This is not of that caliber. Generally, the situation in the eurozone stabilized and several countries have come a long way in debt restructuring. The risk of contagion to other countries is much less today.

The weaker euro against the dollar from a slightly longer time frame also depends, according to the head of research, that central banks’ management of interest rate tool is expected to differ.

– This is a game where the central bank Fed and the ECB move in different directions. The next step by the Fed is likely a rate hike in 2015. In contrast, counts many that the ECB has to stimulate the economy even more.

Torbjorn Isaksson adds to the current weakening of the euro, mainly related to Greece .

– There will be a market focus on Greece during the week and help volatiltet on the market.

Nordea’s main scenario is that the country remains in the euro zone.

– But of course Greece may provide cooperation and a certain mess it will be if this happens. There is uncertainty right now and that is what you can see on market reactions, says Torbjörn Isaksson.