Why isn’t the Euro already a lot lower?  On the face of it things are only getting worse for the Euro.  Peripheral bond country yields are rising, the Swiss central bank doesn’t want to take Irish bonds as collateral any more and it seems like bank bondholders will now be at risk for haircuts if the banks fail.  If one takes a look at purchasing power parity the Euro remains overvalued.  Given all these headwinds the Euro should be lower.  However the core of Europe, Germany is doing well and is in no great hurry to break-up the Euro.  Is noted forex trader John Taylor right that the Euro could head to parity, or is the Euro likely to muddle along for the time being?  In today’s screencast we look at the state of the Euro.

Items mentioned in the above screencast:

Euro bond yields continue to soar.  (Calculated Risk)

John Carney, “Now Switzerland may be in the position to threaten the stability of the euro by refusing to take sovereign debt from eurozone nations.”  (NetNet)

Are Euro bank bondholders in line for haircuts? (Daily Telegraph)

Why isn’t the Euro lower?  (Free exchange)

Germany doesn’t want the Euro to fail.  (Money Game)

Noted forex trader John Taylor thinks the Euro has much farther to fall.  (Insider Monkey)

Daily chart of the Euro/US dollar. (Finviz)

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