At around USD 1.05 on 5 January, the euro is trading at one of its lowest levels against the dollar in the past 15 years. It is also very cheap regarding its purchasing power parity (USD 1.30), an advantage for European exporters that is bound to persist. This can almost entirely be attributed to the monetary policies of the US Federal Reserve (Fed) and the European Central Bank (ECB), which are completely out of phase.
Whereas the first has begun to raise key rates, the other is resolutely holding the cost of money below the zero lower bound. The Fed halted its quantitative easing programme - the modern version of printing money - in October 2014, while the ECB is pursuing QE at a monthly pace of EUR 80 billion (soon to be reduced to EUR 60 billion).
As a result, the already historical-wide yield gap, which largely governs the weakening of the single currency, continues to widen.
BNP Paribas SA published this content on 06 January 2017 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 06 January 2017 16:17:11 UTC.
Original documenthttps://group.bnpparibas/en/news/weak-euro-long-7-days-economics
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BNP Paribas is France's largest banking group. Net banking product (NBP) breaks down by activity as follows:
- retail banking (54%): retail banking activity in France (24.1% of NBP), in Belgium (14.6%), and Italy (10.2%). The remainder of the NBP (51.1%) is from international activities and specialized financial services activities (consumer loans, real estate credit, leasing credit, car fleet management, computer equipment leasing);
- finance and investment banking (34.4%): consulting and capital market activities (83.7% of NBP; merger-acquisition consulting, activities related to the stock, interest, and exchange markets, etc.) and financing (16.3%; financing for acquisitions, projects, raw material transactions, etc.);
- institutional and private management and insurance (11.6%): asset management, private banking activity (No. 1 in France), real estate and on-line brokerage services, insurance and securities services (No. 1 in Europe for retained securities).
At the end of 2023, BNP Paribas was managing EUR 988.5 billion in current deposits and EUR 859.2 billion in current loans.
Net banking product is distributed geographically as follows: Europe, Middle East and Africa (82.9%), America (9.8%) and Asia/Pacific (7.3%).