Pantheon Macroeconomics - With the euro down more than 23% since the peak of 1.39 against the dollar last year, investors are pondering just how low the single currency can go. If the purchasing power parity holds in the long run, the real effective exchange rate, REER, should be stationary--mean reverting--around a constant average in the long run.

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20 Mar. 2015 The Euro Probably is Undervalued, But it Could Move Even Lower

By Claus Vistesen

With the euro down more than 23% since the peak of 1.39 against the dollar last year, investors are pondering just how low the single currency can go. If the purchasing power parity holds in the long run, the real effective exchange rate, REER, should be stationary--mean reverting--around a constant average in the long run.

Posted: 20th Mar 2015 in 'Eurozone Documents'

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