“The EU and the ECB did an excellent job of preparing the world financial system for the euro and then maintained its value with a rigorous anti-inflation policy," says Joseph Trevisani, Chief Market Analyst at FX Solution. "Unfortunately much of that decade of work has been undone by the Greek crisis.”
A decade after its inception, the Euro is facing the biggest challenge in its short life. After dominating the market , the unique currency is now experiencing difficult times and losing almost all of the gains reached in the past.
In this exclusive interview, Trevisani states that the ECB should do structural changes to be more efficient in its crisis management: "The ECB independence and forcefulness against inflation of this past decade has been an anomaly. Central banks do not exist outside their political environment.”
Joseph Trevisani is a respected and renowned fundamental analyst. Prior to joining the online trading industry he worked at Credit Suisse for 12 years in New York and Singapore as an interbank currency trader and trading desk manager.
Asked about which currency will be the 'king' in the next ten years, Joseph answered without a shadow of a doubt: “USD”.
The inception of the Euro took place in January 1999. What did the change from 11 different currencies to one mean for the currency market ?
The biggest change was the reduction in volatility. When every European country had its own currency, the limited liquidity in many of the smaller ones almost guaranteed heavy volatility in any less than normal trading situation. Most of that trading interest is now concentrated on the euro.
How did this event impact on the FX global market at that time and in the following years?
It was initially feared that the advent of the euro would diminish interest in currency trading, that has not proved to be the case. Fortunately for currency trading the euro began at almost the same time as the internet. The growth in interest in currency trading was given a huge boost by the net and the retail firms that brought forex trading to every computer.
What have been the most important challenges for the Euro in the last 10 years?
The chief challenge for the euro was in establishing its credibility as a store of value and as a trading and funding currency. The EU and the ECB did an excellent job of preparing the world financial system for the euro and then maintained its value with a rigorous anti--inflation policy. Unfortunately much of that decade of work has been undone by the Greek crisis.
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