Euro vs Dollar

[Victor Galis]

Just out of curiosity what is the current rate?

[Roland]

0.985

[Victor Galis]

Really? Hmm... right now I am just praying for some sort of weakness in the pound so that the rest of my vacation will get a bit cheaper.

[The Viceroy]

I didn't mean its original value was parity, it was set up to match the dollar .. it was set up at above 1 as they knew full well it would fall in value during the period where it was not a real currency.

I agree that parity is a psychological thing, especially to the markets... but it does have ramifications regards to trade, which in turn directly affect profits/share prices in the long run .. I personally do not consider 1/1 a strong Euro or a weak dollar ..

What I was trying to say originally was, that you cannot assume the dollar is dead, just because it has lost some value against the euro .. not is it an indication of any strength in the European economy that will lead to it becoming the no.1 economy .. if in 5-10 years were no longer sitting at 1/1 , we will see which economy was strongest, and that would be a much more valid test than a weeks change on the markets.

[Victor Galis]

Or should I just buy a lot of pounds while the dollar has some semblance of strength left?

[Ecthy]

Rate isn't interesting. Change of it is.

[Roland]

"I didn't mean its original value was parity, it was set up to match the dollar .. it was set up at above 1 as they knew full well it would fall in value during the period where it was not a real currency."

No. It started at that rate as it was the 1:1 successor of the ECU. The ECU was created by a reference to the $ in the 1970s, but has been all over the place below and above 1 $.

"What I was trying to say originally was, that you cannot assume the dollar is dead, just because it has lost some value against the euro .."

I said when the US sees net outflows the $ is dead. Meaning it will drop very sharply.

"if in 5-10 years were no longer sitting at 1/1 , we will see which economy was strongest"

Exchange rate and economic strength are only very losely related.

[Ecthy]

Roland, does that mean that since the 70s Europe has caught up with the US and had a 1.18 tiems as strong *insert whatever is decisive for exchange rate here* in comparison with the US of the 70s nowadays?

[Roland]

No, I'm not even sure it started out 1:1. It was based on a basket of european currencies using the $ as a starting point for calculating.

The $ has fallen vs a synthetic euro using the DM as a benchmark from 2:1 to 1:1 since the early 70s. Because it was overvalued back then, and US inflation was higher.

[Ecthy]

So should we invade them now?

[Roland]

No, we should wait for 1 euro = 1.40 $.

[Ecthy]

What would be the preconditions for such a development?

[faded glory]

Wasnt the euro made to match the $$$$ ???? I mean, it wasnt as much of a competitive thing as it was to single the whole euro currency so trade and travel between european nations could be made easy.


Please dont feed the trolls.

[Bereta_Eder]

2 years ago if someone said that the euro would compete with the dollar he would have been laughed off.

now the euro is doing just that.

now all i want is more euros please.

[TCO]

1. It's so funny to hear this kind of national pride wrt exchange rates. Especially from people who claim they are sick of hearing it.

2. Looks like our companies and assets will be cheap, now. Feel free to buy more Chryslers and than brag about it...