In France, harmonised inflation fell to 0.9% in February. This is a very low level for one of the major European economies. Further relief was provided when the European Central Bank (ECB) lowered its key rates earlier this month.
If a little cheaper credit shall keep our savings afloat, it must be admitted: much of their performance will be decided far from our countries. The question of how Donald Trump's tariffs will impact our economies remains.
Washington, Moscow, and perhaps Saudi Arabia will also determine the future of the conflict in Ukraine. Finally, how our currency evolves depends mainly on the US Federal Reserve's monetary policy.
Currency parity worries both sides of the Atlantic
An ECB that is too enthusiastic about further lowering its key rates could quickly push its currency to parity with the US dollar.
This situation concerns both the Federal Reserve and the ECB. Currency parity would boost import prices and, thus, inflation. The White House would also not appreciate this, repeating its wish to see a US dollar that is not too expensive.
Therefore, the ECB is facing significant challenges. At this stage, we only invest in the euro area through individual shares.