Best of the Week
Most Popular
1. Dollargeddon - Gold Price to Soar Above $6,000 - P_Radomski_CFA
2.Is Gold Price On Verge Of A Bottom, See For Yourself - Chris_Vermeulen
3.Dow Stock Market Trend Forecast 2018 - Nadeem_Walayat
4.Gold Price to Plunge Below $1000 - Key Factors for Gold & Silver Investors - P_Radomski_CFA
5.Why The Uranium Price Must Go Up - Richard_Mills
6.Dow Stock Market Trend Forecast 2018 - Video - Nadeem_Walayat
7.Jim Rogers on Gold, Silver, Bitcoin and Blockchain’s “Spectacular Future” - GoldCore
8.More Signs That the Stock Market Will Rally Until 2019 - Troy_Bombardia
9.It's Time for A New Economic Strategy in Turkey - Steve_H_Hanke
10.Fiat Currency Inflation, And Collapse Insurance - Raymond_Matison
Last 7 days
Golden Sunsets in the Land of U.S. Dollar Hegemony - 20th Sep 18
5 Things to Keep in Mind When Buying a Luxury Car in Dubai - 20th Sep 18
Gold Price Seasonal Trend Analysis - Video - 20th Sep 18
The Stealth Reason Why the Stock Market Keeps On Rising - 20th Sep 18
Sheffield School Applications Crisis Eased by New Secondary Schools Places - 20th Sep 18
Precious Metals Sector: It’s 2013 All Over Again - 19th Sep 18
US Dollar Head & Shoulders Triggered. What's Next? - 19th Sep 18
Prepare for the Stock Market’s Volatility to Increase - 19th Sep 18
The Beginning of the End of the Dollar - 19th Sep 18
Land Rover Discovery Sport 'Approved Used' Bad Paint Job - Inchcape Chester - 19th Sep 18
Are Technology and FANG Stocks Bottoming? - 18th Sep 18
Predictive Trading Model Suggests Falling Stock Prices During US Elections - 18th Sep 18
Lehman Brothers Financial Collapse - Ten Years Later - 18th Sep 18
Financial Crisis Markets Reality Check Now in Progress - 18th Sep 18
Gold’s Ultimate Confirmation - 18th Sep 18
Omanization: a 20-year Process to Fight Volatile Oil Prices  - 18th Sep 18
Sheffield Best Secondary Schools Rankings and Trend Trajectory for Applications 2018 - 18th Sep 18
Gold / US Dollar Inverse Correlation - 17th Sep 18
The Apple Story - Trump Tariffs Penalize US Multinationals - 17th Sep 18
Wall Street Created Financial Crash Catastrophe Ten Years Later - 17th Sep 18
Trade Wars Are Going To Crash This Stock Market - 17th Sep 18
Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - 17th Sep 18
Financial Markets Macro/Micro View: Waves and Cycles - 17th Sep 18
Stock Market Bulls Prevail – for Now! - 17th Sep 18
GBPUSD Set to Explode Higher - 17th Sep 18
The China Threat - Global Crisis Hot Spots & Pressure Points - 17th Sep 18 - Jim_Willie_CB
Silver's Relationship with Gold Reaching Historical Extremes - 16th Sep 18
Emerging Markets to Follow and Those to Avoid - 16th Sep 18
Investing - Look at the Facts to Find the Truth - 16th Sep 18
Gold Stocks Forced Capitulation - 15th Sep 18
Hindenburg Omen & Consumer Confidence: More Signs of Stock Market Trouble in 2019 - 15th Sep 18
Trading The Global Future - Bad Consequences - 15th Sep 18
Central Banks Have Gone Rogue, Putting Us All at Risk - 15th Sep 18
Gold Price Seasonal Trend Analysis - 14th Sep 18
Growing Number of Small Businesses Opening – and Closing – In the UK - 14th Sep 18
Gold Price Trend Analysis - Video - 14th Sep 18
Esports Is Exploding—Here’s 3 Best Stocks to Profit From - 13th Sep 18
The Four Steel Men Behind Trump’s Trade War - 13th Sep 18
How Trump Tariffs Could Double America’s Trade Losses - 13th Sep 18
Next Financial Crisis Is Already Here! John Lewis 99% Profits CRASH - Retail Sector Collapse - 13th Sep 18
Trading Cryptocurrencies: To Win, You Must Know Where You're Wrong - 13th Sep 18
Gold, Silver, and USD Index - Three Important “Nothings” - 13th Sep 18
Precious Metals Sector On a Long-term SELL Signal - 13th Sep 18
Does Gambling Regulation Work - A Case Study - 13th Sep 18
The Ritual Burial of the US Constitution - 12th Sep 18
Stock Market Final Probe Higher ... Then the PANIC! - 12th Sep 18
Gold Nuggets And Silver Bullets - 12th Sep 18
Bitcoin Trading - SEC Strikes Again - 12th Sep 18

Market Oracle FREE Newsletter

Trading Any Market

Euro most expensive in Greece

Currencies / Euro Dec 06, 2011 - 07:38 AM GMT

By: Pravda

Currencies

The euro is overvalued in several countries of Southern Europe. The joint European currency is undervalued in other countries of the European continent, particularly in the north and in the center of the EU. The euro is most expensive in Greece and least expensive in Belgium, experts said.

Europe's southern states, which have debt problems, are supposed to be interested in a weaker euro. However, it is impossible to do it in one separate state since the currency is common for many other countries.


A report from the Center or Macroeconomic Research of Russia's largest state-run bank Sberbank said that the euro is overvalued in general. It does not go about the European currency in the south of Europe, the Vedomosti newspaper said.

In Greece, the euro is overvalued most among 22 developed countries that were included in the review. The Greek euro is thus most expensive, the experts concluded after they analyzed the real effective courses of the currencies and their equilibrium value. In particular, the fair rate of the euro for Greece would make up $0.97. However, the country uses the euro that costs $1.34.

The currencies of Greece, Portugal and Spain need to be lowered by 19.5, 17.8 and 15.5 percent respectively. The Italian euro is 6.1% overestimated; in Ireland, the currency is overvalued by 9.7%.

Greece, Spain, Italy, Ireland and Portugal are in the crisis zone. However, these countries are virtually deprived of the currency regulation tools - devaluation in this case. Instead, they have to cut budget spending, which triggers protests on the part of the population. If the governments of those countries could gradually devalue their currency, they would reach the desired results a lot easier.

As for Germany and France, the euro in these countries is undervalued by approximately 5%. This contributes to export success of the German industry. In Belgium, the joint European currency is 6.8% undervalued. If the rates were equal, today's euro would cost 1.23 of the Greek euro and 0.92 of the German euro, the Vesomosti wrote.

According to the above-mentioned report, the British pound and the Swiss frank are undervalued most (15%). It is also very important that the countries that preserved currency independence, are much more stable than those that did not.

Sweden is Europe's most successful borrower, the experts concluded. The financial system of the country looks stable. On December 1, Standard & Poor's raised the ratings of Sweden's four largest banks from A to A+.

In 2011, Sweden managed to cut its public debt to 36% of the GDP vs. 40.2% in 2007. At the same time, the average indicator of the public debt-GDP correlation in the Eurozone makes up 88%.

As a result, the yield of Swedish securities lags 40 basic points behind the most reliable debt securities in the Eurozone - Germany's. Sweden has become a quiet harbor, and the country may benefit from it in the nearest future already. Investors know where they can "run" in case the state of affairs in the Eurozone takes a dangerous turn.

It is worthy of note that several European countries may introduce their own national currencies to solve the debt problems. The euro as the joint currency will be preserved in the "core" - Germany, France, Belgium, Holland and several others.

Boris Yaremenko

Bigness
Pravda.ru

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Pravda Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules