In an interview with Bloomberg TV, Deutsche Bank’s George Saravelos spoke about the main point he made in his talk about the euro:
- “Imagine a situation where the US erects a massive tariff wall against China.”
- “All these Chinese goods will have to be diverted to other markets including Europe, so we will see a big deflationary shock in Europe.”
- He says such tariffs would be implemented more comprehensively and quickly if Donald Trump wins the US presidency, leading to parity between the euro and the dollar.
more:
- Imposing more tariffs on China and elsewhere would have inflationary consequences for the United States.
- Deflationary consequences for the rest of the world
- This would exacerbate the asymmetry between the Fed and the ECB.
This article was written by Eamonn Sheridan on www.forexlive.com.