While the United States makes a slow recovery from the economic battering of the past five years, the outlook for Europe is bleaker.
During his keynote address at the Worcester Business Journal's Global Business forum at Worcester's Beechwood Hotel today, TD Securities Chief FX Strategist Shaun Osborne said U.S. growth is on par with expectations of a 2 to 2.5 percent growth rate for the year, while the Eurozone will have little to none.
"There is no prospect of growth in any of these economies anytime soon," Osborne said.
The bright spot in Europe remains Germany, according to Osborne. He said the country has benefited from its focus on trade.
"Trade has been a great boon for Germany since the advent of the Euro," he said, adding that the Euro has helped keep Germany competitive.
Unemployment, debt levels, interest rates and lack of growth plague the region. Unemployment in nations like Italy, Greece, Spain, Portugal, Ireland and the United Kingdom remain in the double digits with more than 50 percent of people ages 25 and younger in Greece and Spain having no work.
Osborne said Spain and Italy have too much debt for the European Union to support them and the EU has struggled to keep Ireland, Portugal and Greece afloat.
He said lack of growth is a problem that is compounded by interest rates the countries are paying for the debt they already have and said he's not confident the economies can "turn around in a timely manner."
Osborne said Europe's chance for a turnaround lies in the countries doing internal devaluations, getting wages and prices down to match the competitiveness of Germany.
As far as currency, he said the Euro should be trading lower and probably will fall more, which is good news for American importers. The last two quarters saw an increase in holdings of the U.S. dollar and Osborne said its trade index had increase for 14 consecutive days, a rarity for any currency.
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