NEW YORK (TheStreet) -- The good news for Mario Draghi, president of the European Central Bank, is that the value of the euro dropped has dropped below $1.32. In May, the Euro was trading above $1.39.
Investors are expecting that the euro will fall further, now placing more bets in the futures market that the Euro will decline than at any time in the past two years.
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Although Draghi has resisted moving to any form of quantitative easing, he made some remarks at the Federal Reserve's Jackson Hole meeting that the market has interpreted as a sign that he is giving more consideration to such a policy in the future.
As I have written before, it would not be surprising if, in the current situation, the value of the euro fell below $1.30 before the end of the year. This would represent a drop of almost 7% from its May highs.
Draghi has been reluctant to move toward a policy of quantitative easing, even though he has faced tremendous pressure to do so, basically because the evidence from the U.S. experiment has not been that encouraging when it comes to achieving faster economic growth.
There is one aspect of the American quantitative easing effort that might be of interest to Draghi at this time. Quantitative easing in the U.S. provided a massive amount of liquidity to the financial markets, making it easier for banks with underwater assets to hang on until they could unload securities or be closed or merged in an orderly fashion.