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Predicting the Euro: A Practitioner’s Perspective

  • Abheek Barua
Chapter

Abstract

For a financial market practitioner, the task of predicting the Euro seems to present new and daunting challenges every year. For one thing, the turn of events in Cyprus in the second half of March 2013 points to the continued existence of unknown pockets of risk in the region. Although Cyprus was known to have its share of financial troubles emanating largely from its banking system and had been negotiating a bailout with the troika of the European Union (EU), International Monetary Fund (IMF) and the European Central Bank (ECB) since 2012, financial markets woke up to the possibility of a ‘shock’ to the Euro-zone economy from this tiny Mediterranean island (it accounts for just 0.2 % of gross domestic product (GDP)) barely a month before it hit the headlines. The markets’ focus shifted to Slovenia and Malta in the wake of the problem in Cyprus but the probability of a banking/fiscal crisis unexpectedly emerging from some other part of the currency union is certainly not negligible. Thus, as recently as the first quarter of 2013 Europe remains a somewhat uncharted minefield.

Keywords

Gross Domestic Product European Central Bank Credit Default Swap Unit Labour Cost Sudden Stop 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer India 2014

Authors and Affiliations

  1. 1.HDFC BankMumbaiIndia

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