January 17, 2021



WSJ: “Torrent of Cash exits Eurozone”

Investors seek to be less exposed to the fluctuations of the Eurozone, by restructuring their portfolios, while, according to the Wall Street Journal, the Euro is being pressured, propping up the value of the US dollar.

The Danish central bank has lowered interest rates 4 times this year to dishearten investors from the Danish Kroner while Switzerland has proceeded with similar actions to revalue the Swiss franc up to 40%, after withdrawing the minimum rate with the euro.

The WSJ estimates that the fall of the Euro compared to the dollar by 22% in less than a year is not only due to the ECB’s program but also on the “bets” of investors that the common currency will receded further, and the abandoning of the currency by said investors.

The differing strategies between the ECB and the Fed is the catalyst of portfolio restructuring and the transfer of foreign currency from Euros to dollars.

This trend seems to be followed by central banks in China and the Middle East which had a lot of Euro currency “Stocked up”, but are now changing direction.