Euro May Fall on Eurozone PMIs as Coronavirus Stokes Recession Fears

Euro May Fall on Eurozone PMIs as Coronavirus Stokes Recession Fears

The Euro may fall on the Eurozone PMIs as the Coronavirus Stokes Recession Fears of the EU. Indeed, even as it is torn apart by political infighting, and as the European Central Bank (ECB) continues to destroy credibility with its asset purchase program, inflation remains far too low and interest rates are near historic lows.

Indeed, the ECB has revealed its true colors, as the Euro goes down, and the Euro stays up. For this reason, the Euro is not falling on the Eurozone PMIs as the Coronavirus Stokes Recession Fears is being stoked. As long as the Euro remains at levels that cannot be sustained and interest rates remain low, inflation will remain low and unemployment will remain high.

Rather, the problem with the Euro is that the EU has proven unable to manage and create an environment that would permit the Euro to grow and strengthen in the face of deflation. For this reason, we can expect the Euro to remain where it is, but not fall on the Eurozone PMI as deflation rises to the surface.

In short, deflation raises the risk of deflation in the Eurozone. As the Euro falls, it weakens the Eurozone. And, when it weakens the Eurozone, it weakens the real economy, such that deflation emerged as a global phenomenon, much as it did in Japan in recent years.

Rather than falling, the Euro is staying put. Indeed, the Euro's failure to fall does not bode well for the Eurozone and certainly does not help to reduce the threat of deflation. Indeed, the Euro will only add to the deflationary pressures that already exist in the Eurozone.

And, it also means that the ECB is in fact not even attempting to prevent deflation in the Eurozone. Indeed, the Euro is simply allowing deflation to creep up on the Eurozone, just as the US dollar has allowed deflation to creep up on the US Dollar. While the Euro's real strength is proven and history shows it, it is the very weakness of the Euro that is proving to be the greatest strength in the Eurozone.

The absence of deflation in the Euro means that the inflation rate is predicted to rise instead of fall. Therefore, it is these inflation forecasts that are helping to further raise the risks of deflation.

And, while the absence of deflation in the Euro means that there is no deflation threat, the reason the Euro is staying put is that the Eurozone is now making up for lost ground, and there is no doubt that this is welcome news for the Eurozone. Indeed, if deflation is allowed to emerge as a global threat, it is this strength of the Euro that will prove to be the strength of the Eurozone.

Furthermore, we can expect the Euro to remain where it is, but not fall on the Eurozone PMI as the Coronavirus Stokes Recession Fears is being stoked. Indeed, as long as the Euro remains at levels that cannot be sustained and interest rates remain low, inflation will remain low and unemployment will remain high.

Rather, the problem with the Euro is that the EU has proven unable to manage and create an environment that would permit the Euro to grow and strengthen in the face of deflation. For this reason, we can expect the Euro to remain where it is, but not fall on the Eurozone PMI as the Coronavirus Stokes Recession Fears is being stoked.

As long as the Euro remains at levels that cannot be sustained and interest rates remain low, inflation will remain low and unemployment will remain high. Rather, the problem with the Eurois that the EU has proven unable to manage and create an environment that would permit the Euro to grow and strengthen in the face of deflation.

Indeed, as long as the Euro remains at levels that cannot be sustained and interest rates remain low, inflation will remain low and unemployment will remain high. rather, the problem with the Euro is that the EU has proven unable to manage and create an environment that would permit the Euro to grow and strengthen in the face of deflation.