Late European session the euro appreciated by 1

The scenario was played in advance, but the foreign exchange market has nevertheless responded. The meeting of the European Central Bank (ECB) yesterday brought no new element in the policy of exit - or maintaining - the device of crisis in the euro area and on its schedule. Jean-Claude Trichet, President of the institut d ' émission, spoke only of "normalization" of the process of supply of liquidity to banks and made an appointment for the month next to discuss the future of non-conventional measures. The contrast with the announcements of the Federal Reserve, the day before, was striking. U.S. monetary authorities will start to buy loans to State, for an amount of $ 600 billion.

The policy of the Federal Reserve is likely to create money and thus weakening the dollar against other currencies. French economy Minister Christine Lagarde also moved this situation. "L ' euro bears the weight of it", she told the Wall Street Journal yesterday. "I am not currently be a judgment on the American quantitative easing." But this shows the imperative need for rethinking the international monetary system and the mechanisms of cooperation. "In fact, the single currency climbed yesterday at its highest level since January. Late European session, the euro appreciated by 1.13, to 1,4200 dollar, after having jumped up to 1,4282. The European currency soared more than 12 percent against the greenback since the idea of a resumption of the "quantitative easing" spread, the last entry.

Policy divergence

The divergence of monetary policy is also one of the factors behind the rise of other currencies, as the Australian dollar (while the Australia is in a phase of monetary tightening). Practical yesterday 1.63, and total one of the strongest gains in three months (10.5). Among the most sought after currencies yesterday, the New Zealand dollar was 2.36, the Norwegian currency 1.97 and the Swedish Crown 1.67.

A number of strategists believe that the program of the US Federal Reserve is likely to disappoint with respect to its effects on the economy. "We do not believe that the Fed will be many illusions about the fact that purchases of assets may have a visible impact on realized inflation or unemployment", says Bruno Cavalier, Oddo securities. The first signs of ineffectiveness of measures could halt the decline of the dollar.

On the other hand, attention has focused over the past two months on the strategy of the Federal Reserve could soon focus on more fundamental topics, including on the question of peripheral debt in the euro area, where tensions are again very vives. "Local elections are held in Greece this weekend and the Prime Minister talk about as of a referendum on the country's rescue plan", is concerned about Chris Turner, at ING. Moreover, the Irish Minister for Finance announced yesterday evening a reduction of EUR 6 billion for the fiscal year 2011 budget deficit, which raised some scepticism.

"There is a total disconnect between the euro and the issue of the public finances of the peripheral States, summarizes Raghav Subbarao, at Barclays Capital." We are less positive than before on the European currency.