FX comment: The first euro-to-parity prediction

I was never much of a trend-follower (frequently to my cost), so I like to point out brave contrarian calls when I see them. Failing that, I’ll settle for an outrageously ambitious prediction about a trade for which there is already some consensus.

A note from currency research firm Black Swan Capital falls into the latter category. Built around an article by Martin Wolf in Tuesday’s Financial Times, the gist is that elimination of fiscal deficits by the Club Med nations is a near impossibility. In Wolf’s words: “Germany’s structural private sector and current account surpluses make it virtually impossible for its neighbors to eliminate their fiscal deficits, unless the latter are willing to live with lengthy slumps.