European Central Bank

The index of the dollar’s United States, that measures the evolution of the currency against six major trading partners of the country, it has also placed to its lowest level in 14 months, and has fallen nearly 7% this year. For Rafael Pampillon, Professor of economic environment and country analysis of the IE Business School. The cause of the decline is the doubt that exists at this moment about whether United States will recover earlier than the eurozone, where countries like Germany and France are giving important signals of reactivation, explains, at the same time as also points to differences in interest rates as one of the reasons for the depreciation of the dollar. Currently, the United States (Fed) Federal Reserve, preserves the price of money at 0.25%, while the European Central Bank (ECB) has located them at 1%. In United States rates still lower for longer because concern about inflation is lower than in Europe, where the ECB has the express mandate of keeping the increase in consumer prices below 2%, so it would be more willing to raise rates as inflationary threats, in its analysis and contribution of Federico Steinberg, Principal investigator of the economics and international trade of the Royal Institute and Professor of the Universidad Autonoma of Madrid stands out.

that before the panic in the markets that followed the collapse of Lehman Brothers, there was a flight to safety, which produced a sharp appreciation of the dollar, despite the fact that the crisis had set in United States. However, continues, once normalcy begins to return to the financial markets, has taken up the trend pre-crisis, in which the external deficit and the accumulation of us debt, together with the rigidity of the exchange rate of China, make sure the weight of the adjustment of global imbalances is in an appreciation of the euro… Steinberg says that the depreciation of the dollar, coupled with the appreciation of gold and the statements of China about the need to replace the greenback as the global reserve currency, have reopened the debate on the prospects that the euro will replace the dollar as the global hegemonic currency.