Hi everyone – the relentless rise of the eur/usd continues apace with no end in sight at the moment. For those of you long the market, I would suggest that you keep your positions open, as I believe that the pair are heading for higher ground still, to around the 1.45 level – if the pair continue through this level then it is possible that 1.50 could be achieved.
Whether this rise continues or sustained will be determined by the politicians as Euro strength is causing severe damage to exporting and multinationals such as Airbus because aeroplanes are sold in dollars. An example of the scale of the problem was given by the company in September when a cost saving and restructuring program based on an exchange rate of 1.35 would yeild 2.8 billion dollars. However, at an exchange rate of 1.45 Airbus would have to find an additional 1.4 dollars in savings. Its not surprising that the French President Sarkozy is desperate for the ECB to cut interest rates and for the euro to weaken.