Stopping the devaluation of the Euro currency.
Devaluation is an artificial reduction in the value of one currency in relation to a number of other significant currencies.
This usually occurs due to an increase in the unsecured money supply, which leads to a depreciation and increased inflationary processes.
Until recently, the European Central Bank adhered to the policy of devaluing the Euro, which made it possible to significantly reduce the exchange rate of the Euro against the US dollar and a number of other currencies.
Thanks to this policy, the euro has lost about 20% of its value over the past two years, thereby stimulating the European economy to grow.
But last week, the leadership of the Central Bank decided to suspend this process, that is, measures will be taken to reduce the flow of unsecured money supply into circulation.
Firstly, an excessive fall in the Euro could reduce the positive effect on the economy and cause an outflow of investment.
Secondly, this is the reaction of the European Union to the US accusation of distributing loans to the European Center at 0%. So over the past two years, about 900 billion Euros have been issued.
The decision to stop the artificial devaluation of the Euro allows us to talk about the exchange rate uptrend for the euro/dollar currency pair. It is clear that we are talking about the long term here.