NEW YORK (TheStreet) -- Hard economic times are pinching the Eurozone and the once powerhouse Germany is starting to recoil along with France and Italy from the tightening squeeze and fear of deflation.
There's little doubt European Central Bank President Mario Draghi would like the euro to value to decline further as that would make Eurozone products more desirable on the world market.
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Draghi has seen to lowered ECB policy rates, one even into negative territory, but has been reluctant to move into the policy area of quantitative easing. The closest move in that direction was last week's proposal that the ECB purchase asset-backed securities, with the option of buying sovereign debt not discarded altogether. The full program will be discussed at the October ECB meeting.
Previously Draghi hadn't shown much interest in any form of quantitative easing so this was seen as a positive move to an easier monetary stance by investors. The proposal surfacing had a favorable impact on the market.
The market dropped below $1.3000.
I am still not convinced that Draghi wants any form of quantitative easing, yet he wants the value of the euro to decline further so as to spur on Eurozone exports. U.S. results of quantitative easing hasn't convinced Draghi the same initiative could spur the Eurozone economies.
Draghi's objective seems to be a further decline in the value of the euro. The question is whether or not the euro can decline further? Looking at recent history it is clear that the euro can decline further...and fairly rapidly.