Wall Street Journal
March 9, 2011
The threat of military intervention in Libya is like the elephant in the room.
It is there. It is big. But no one is really talking about it.
On the contrary, with a host of other fundamental factors in play in financial markets, analysts appear determined to come up with just about every other excuse for explaining the movements of the majors.
Over the past few days, for example, many banks have rushed to raise their near- and medium-term forecasts for the euro against the dollar following a signal from the European Central Bank that rates could be increased as early as April.
But this is all happening against a background of high uncertainty. As the cost of peripheral euro-zone debt continues to rise, the threat of sovereign default remains and the growth prospects for the euro zone are still very much in doubt.
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