Euro Will Continue to Dive: Currency Expert
The euro fell sharply against the U.S. dollar Friday after Fitch downgraded Spain's credit rating. Which way will it go next? Boris Schlossberg, director of currency research at GFT Forex, discussed his outlook.
“This is a very natural short-covering rally,” Schlossberg told CNBC. “I don’t think we’ve seen the lows yet.”
Schlossberg likened the markets to a “guy who fell off a motorcycle” and has yet to feel the full impact of the accident.
“What you’re going to see over the next couple of months is only going to accelerate and it will be the political factors that are going to weigh on the euro as we go forward,” he said.
Schlossberg said he is also concerned about a second credit crunch as Europe’s debt crisis drags down the rest of the global economy.
“I’m worried that as second half of 2010 comes in, we’re going to see much slower growth around the world than everyone anticipates,” he said. “There will be much less lending—we’re in a deleveraging period in Europe—that means much less demand and growth out of China, Australia and ultimately from us.”
“Last time, China was able to offset the credit crunch in the U.S. by doing internal demand. That card has been played, so I’m trying to see where the next card is going to be played to stimulate global demand.”
Scorecard — What He Said:
- Watch Schlossberg's Previous Appearance on CNBC (May 21, 2010)
Pros Speak on Currencies:
- Morici: Who Needs The Euro Anyway?
- Dollar Index to Hit 88.5, then 'Collapse': Charts
- Expect Euro to Start Recovering: Chief Investor
CNBC Data Pages:
Friday's Biggest Dow Laggards (as of this writing):
No immediate information was available for Schlossberg or his firm.