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Europe versus the USA and the EUR/USD

Now that pretty much all of the S+P 500 component companies have released their Q3 earnings reports, the take-away from that lot is a picture of outperformance. According to reports I have heard, that concerns some 76% of those companies beating forecasts. According to the same research, that compares to only around 13% of European companies managing the same feat. There can be little doubt, that as yet the shift in US monetary policy throughout 2023 has not dented the corporate sector and the lack of recession continues to defy many leading analyst predictions. The same cannot be said of the situation here in Europe. So, why is the EUR/USD closer to 1.10 than parity you might ask. I cannot give you a straight answer on that right now, but what I can assume; is that this is cyclical to a large degree. Several weeks back an update here noted, that in 2022 the Dollar had peaked at the very end September. If you look at a chart right now on the EUR/USD, you will see the US dollar has seemingly peaked on October 2 (EUR/USD low then at 1.0448). So, pretty much at the exact same time in the calendar- at, or very close to the end of Q3. Hence, this looks like a repeat of 2022 and if that is the case, then it would not be inconceivable for the dollar to have to wait for Q1, 2024 before the flow heads back in its favour. There will be more to add on this in many updates to follow. The EUR/USD closed on Friday at 1.0939. It is just now pressing closer to the 1.0960 level once more. The range seen has been 1.0927 to 1.0956. It is currently at 1.0951

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