Spike in the Euro

by Faysal Badran March 1, 2004

written by Faysal Badran March 1, 2004

Back in January 2002, we analyzed the fate of the euro in this section, looking at its performance since its launch and placing the technical framework for what appeared to be a move up, destined to hit the $1.17-$1.20 area. As is often the case in the currency markets, the euro has not only overshot on the upside, but has clearly been on an uninterrupted rampage against all currencies reaching 1.2950 against the US dollar. This has been the result of a confluence of factors. While it is entertaining to look at the factors, we should keep in mind that the strength of the euro is more attributable to a weakness in the US dollar, both market driven and policy driven than any convincing fundamental strength in the European economy, either nominally or on a relative basis. The fact that global central banks, especially in Asia have been replenishing their

Faysal Badran

Faysal Badran is the head of NCB Capital, a Saudi-based wealth and asset management firm. He oversees the company’s regional and international equities, global fixed income, money market, and alternative investments. Before joining NCB Capital, Badran spent five years at its parent company, National Commercial Bank (NCB), working in the office of the chief financial officer and in the international sector division. He also contributed as a writer for Executive magazine in Lebanon. Badran holds a bachelor’s degree in economics from DePauw University in the U.S.

Spike in the Euro

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