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The problem of the Euro value

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Euro problem due to European Central Bank (ECB)

Merkel speaks about " The problem of the Euro value”

German Chancellor Angela Merkel believes that there is a problem with the value of the euro. This could be due to the European Central Bank (ECB). Merkel commented on the subject during the Munich Security Conference this weekend in Germany. "The ECB's policy is geared to Germany. Instead, it is adapted to countries like Portugal, Slovenia, and Slovakia."

The Chancellor added: "If we still had the German mark, the currency would certainly have a different value than the euro at present, but this is independent monetary policy, which I have no influence on as German Chancellor. "

Previously an advisor to the US president Donald Trump accused Germany to be benefiting from a "very undervalued" euro. Mike Pence, Vice President of the United States, attended the conference in Munich.

German Finance Minister Wolfgang Schaeuble, also said, in the beginning of February, he considered the value of the Euro far too low. He also pointed to the measures taken by the ECB, which express the exchange rate of the European currency, according to him.

Euro zone inflation in February up to 2 percent

Inflation in the euro zone rose in February up to 2 percent annually.

This shows that from the first estimate made by the European statistical Eurostat last Thursday morning. The ECB wants to keep the inflation just below 2 percent in the “medium term”. The central bank, therefore, pays close attention to inflation expectations, which for now, are still too low.

Inflation has been rising clearly since the end of last year, this just after three years in which inflation remained unbroken, limited to less than 1 percent. The rising inflation is largely due to the recovery in oil prices, which reached its all-time low last year, from a long drop that started back in 2014.

The dollar touches the 2017 low against the peso and allows Mexico to take a breath

The words of a trump consultant who sees the euro "downright undervalued" set the tone in the foreign exchange market.

In a world in which facts are quickly forgotten and what sets the tone are the many very high-sounding statements, the currency market has become accustomed to cut off voice. This Tuesday, the trigger was the words of one of Donald Trump's top advisors on trade, Peter Navarro, who has said he saw the euro "downright underrated". The market has followed its words closely.

The peso has recently become the main pacemaker for the Mexican economy, beset by Trump's inflammatory rhetoric since the US election campaign and its promise to return the US manufacturing industry outsourced to its southern partner.

To Navarro's words, which pointed to Germany as the main beneficiary of the weakness of the euro, we must add the growing doubts about Trump's ability to carry out his economic promises.

This sudden weakening of the dollar against its international peers at a time when the long-term path seemed to indicate just the opposite, brings good news for the US foreign sector: it seems to gain competitiveness artificially, without varying its procedures or Internal costs in the slightest way.

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