Why is the euro so strong?
For the first time since the start of 2015 the euro on Tuesday rose above the 1.20 dollars mark, a psychological threshold for stock markets. The media also see the currency's strength as good news and look into the causes for this surge in its value.
Solid growth is creating optimism
The rising euro reflects above all the stability of the Eurozone, El Periódico de Catalunya writes enthusiastically:
“This is without doubt good news given that the recovery of the US economy could have weakened the common currency first introduced 15 years ago. Independently of other factors like North Korea's military provocations and the potential response from the US, the weakening of the dollar against the euro can be explained by the economic optimism that prevails in the Eurozone, where sustained growth is a constant.”
An island of political stability
The euro's current strength is not just the product of economic factors, Corriere della Sera points out:
“Political aspects play a role in determining the euro's value. The programmes of anti-system parties sound less credible to Europe's voters today. Compared with the turbulence of Brexit London or Trump-era Washington, the Eurozone seems like an island of stability. It's no coincidence that the euro's rise against the dollar began in April, when it became clear that the French would put Emmanuel Macron in the Elysée rather than the champion of sovereignty Marine Le Pen.”
Super Mario will sort it out
The strong euro doesn't endanger the ECB's policy, Les Echos' financial editor Guillaume Maujean believes:
“The rise in value of the euro will no doubt make it more difficult for the ECB to reach its goals. Because a strong euro always means less inflation, and the Frankfurt bank is already having problems bringing inflation up to the targeted two percent. The strong euro won't make its job any easier, but at the same time it shouldn't endanger its strategy as a whole. Mario Draghi still has the strength of his word to correct this small outburst, and he can rely on the scope of his bond-buying programme. If a somewhat stronger currency is the price that must be paid for a return to political stability for the euro, let's pay it without complaint!”