What a rising euro means for the markets

frankfurt Stock exchanges have just staged another intermediate rally – and investors are wondering whether this is a sustainable trend reversal. The unexpectedly low US inflation of 7.7 per cent in October, which fell significantly from the previous month and was announced last Thursday, is not yet a sign of success in the US Federal Reserve’s (Fed) battle against rising prices. Gives

But it may well be that inflation has peaked, with core inflation, which does not include rising energy and food prices, also falling, and there were also encouraging data on US manufacturing prices on Tuesday.

It doesn’t justify last week’s euphoria, but the cautious optimism does. On the other hand, what is likely to remain in the longer term is greater restraint in assessing capital markets. And that too when expectations are met and inflation is completely brought under control without a deep recession.