In a currency pair the value fluctuates according to the strength and relative weaknesses of each one, that is, both may be strong in relation to other currencies, but less in relation to their partner in the pair and this is what has made the difference by this time. In the movement of the Euro in recent days, this is not so much the fact that the single currency has bright prospects, taking into account the current and medium-term state of the economy in the Euro area, with the OECD indicating today that it will only leave the hole created by the pandemic of COVID-19, in 2022, in contrast with the previously estimated that it was already in 2021, since, according to that institution, the tendencies restrictive policies of the different countries jeopardize the recovery.
But in reality if the Euro may have major problems, the fact is that the US Dollar, Yen and British Pound do not have a much more laughing future, as can be seen from the behaviour of their central banks, a kind of oracle for the future of the currency and taking into account that the FED is injecting exorbitant amounts of money into the system, namely in the acquisition of public debt, which this year more than doubled to $4.6 trillion. It is not surprising that the US currency is weaken against the Euro, as even though the ECB has its own stimulus program, it is not currently as aggressive as that of the EDF. In relation to the Yen, the BOJ has remained at the same pace for a long time, but it should be included in this equation that the Japanese currency is also a safe haven, which in the days when the stock market values, as it has been, is hampered. That is why, in the short term, the Euro has some room to rise further, and no major changes to the ECB policy are to be expected, in addition to further stimulus as Lagarde has already insistently mentioned.
