Another market that has spent the past several weeks appreciating in price has been the Euro Currency. There has been some positive data out of the region but nowhere near where the central planners need in order to get out of the way of the free market price discovery, particularly if you are to believe the words of ECB chief Mario Drahgi. Last week he stated that he would be very comfortable in cutting rates at the June meeting to increase liquidity. The market has declined about 3 dollars from nearly 140 to just under 137 in the three session following his statements.
While the ECB continues to claim that the currency valuation is not a part of their mandate, it seems fairly obvious that the easing rhetoric increases substantially when the currency trades higher. It would also seem imperative to any long term economic recovery/prosperity for the region would depend on the import/export ratio which is dramatically affected by the exchange rate of the currency. The powers that be seemed to be much more at ease when the currency was trading under 130, leaving some significant room to the downside from the current market price.