The euro is surging again today, and if the move can be continued a little more than it could easily pass 1.40 (against the dollar) which is remarkable given the prevalence of “parity” predictions not long ago.
One reason the euro is surging, it seems, is that the ECB isn’t aggressively playing the devaluation game, like they are at the BoJ or the Fed (or in Brazil or in Australia, etc. etc.).
But is this a good thing? It’s easy to interpret this tightwadness as just more evidence that the EU is broken — dominated by Germany, wracked with paralysis, and indifferent to the plight of the periphery, which would benefit a lot from a weaker currency.
We know for a fact that the problems aren’t solved in Ireland, Greece, and elsewhere. The economy is still pretty weak across the board.
We suspect that if there were more political unity — i.e. if the countries were actually one country with a single economic agenda (which would be sustainable) — the ECB would be on the devaluation bandwagon with the best of ’em.