E What If The Euro Shoots To 1.20?

Graham Summers, Chief Market Strategist for Phoenix Capital  Research, has made a bold prediction that the end of QE in Europe will push the Euro to 1.20 by summertime.

My head’s awhirl. So many possible “plusses” off-set in my mind by so many possible “minuses.” Help! Your rationality will help me sort this out.

My first thought was, “Impossible, given all the problems of the EU.”

But, I’m a Cause and Effect kind of guy, and my second thought was, “Hmmm. What’s he seeing, in terms of causality, for a stronger Euro?”

It’s perplexing to me anytime anyone can so clearly see things that are invisible to me, so I welcome your thoughts on how to profit should the Eurodollar rise by 15 points over the next six months.  

There are some things we know–or think we know–and one of them is that the Euro is the off-set currency to the US dollar, which must mean that the USD could fall from it’s lofty perch at 1.00+. If the Euro gains from 1.05 to 1.20, does this mean the USD will weaken to 85 … with a new and unpredictable Administration in DC? 

Does the cessation of European money-creation (QE) indicate a healthier EU…or that QE has failed… or that it has succeeded?

We know that Germany has remained productive, but the Brits are gone, and the Mediterranean EU members have remained mired in their “Sloughs of Despond.” Plus France teeters on an insecure political, economic, and social base.

And what does it mean for EU banking…especially since Brexit? German, Spanish, French, Italian, and Greek banks seem like flies drawn to the sugar-point of collapse, and that unsoundness makes me wonder how the EuroD can prosper while the EU banking system is so vulnerable to toxic debt and negative rates. Will the end of European QE also see higher rates creeping in…and to what effect?