EUR/USD: Real costs of QE and regulation are much higher for Europe than is usually assumed – Commerzbank
|Why has the Euro been so weak for so long? Ulrich Leuchtmann, Head of FX and Commodity Research at Commerzbank, analyzes the shared currency outlook.
Europeans are getting poorer on a permanent basis
Permanent EUR undervaluation means that we Europeans are getting poorer on a permanent basis. Sometimes that can become quite obvious, for example when American employees working remotely and pensioners buy up the property market in Spanish holiday resorts. However, even disregarding such obvious effects EUR undervaluation means: we give away our export goods at cheap prices and pay over the odds for our imports.
I am not sure whether this factor was sufficiently considered in the cost-benefit analysis of those who were responsible for QE and regulation.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.