When Sarkozy said they will be defending the EUR, he didn't actually mean that the EU will be intervening in the FX mkt. What he means is that they will be defending the EMU sovereigns in the CDS/govt bond mkt. Given that is what actually ails the EUR ccy, it should benefit.
Yep to above they are going to defend the solvency of the union by not alllowing Greece to collapse but. A weak euro is going to be a boon to the eu because exports will climb The weak euro is going to hurt corporate profits in the us for many of the multinationals I don't think EU will be succesful in keeping the eurozone the way it is. People can vote and they are going to punish those in power The austerity measures in Greece arr tesrig the country apart I don't see the Germans rolling out bailouts to portugal Spain and Italy it would be political suicide The bond vigilantes are going to maintain pressure becuae the political climate is in their favor the europeans are very divided right now even if the heads are trying to show a unified front The game changer will e if the US or china back the EU in a more agressive and open manner via he IMF
I'll double check the CPI numbers but in my own personal life there is no inflation in sight seriously. Gold has been ranging not going up much at all. Gasoline is a seasonal play and always goes up in the summer no matter what. For inflation to occur money has to circulate period and it's not. You can check the Federal Reserve website yourself. The only real sign of inflation I have seen is Crude Dec showing 94 last week until 6E tanked.
I haven't read this thread through but the Eurogroup is not planing to defend the Euro directly in the fx market, that would be impossible for any entity other than the ECB. They are preparing a stabilization type fund, probably to buy bonds of countries in trouble.
This is an impetus for unwinding the carry trade, and buying us long bonds against the macro backdrop Howard Simons describes well... http://www.minyanville.com/business...quantitative-easing-bank-of/5/5/2010/id/28053