Dollar vs. Euro...........

[out_at_sea]

Why is the damn dollar keeps falling behind the Euro?

I usually travel 2 times a year to Europe .....just got back from there and the damn dollar was like 1.25 for an Euro..... one year ago the dollar was higher than Euro.

What is the impact on US economy for having a weak dollar?

Lets hear some opinions from smart economists and not only....

 

[OXANDRIN]

Many reasons for weak dollar

1. The US is at war (uncertainty is bad for currency)
2. US deficit is more than 3% of GDP (we wouldn't be able to get in the Eurozone)
3. Huge trade deficit (keep sending our money out then people sell it to convert it to their currnecy and the FX market gets flooded with dollars causing an excessive supply decreasing price)
4. Fed Funds Rate is at 1% only japan and swiss have lower rates and their currencies are weaker than ours
5. The assholes in DC are keeping the dollar weak to encourage exports increasing companies sales to international markets (this is contradictory to our so-called "strong dollar policy")
6. stock markets become an attractive investment from foriegn nations thus providing more money to the financial service industries in our country

basically..... we need to end the war, erase the budget deficit, reduce the trade defict (or slow it) increase the over night rate, and hope eurodollar trades become more favorable to US reinvestment

 

[OXANDRIN]

Andy Kreiger should run the treasury department

 

[anthrax]

The US$ will stay low against the euro at least until the next election

Bush needs a strong economy to be re-elected

 

[fistfullofsteel]

The US$ will stay low against the euro at least until the next election

Bush needs a strong economy to be re-elected

I remember my economics professor telling me if the unemployment rate is under 5% then usually President in office is re-elected.

 

[collegiateLifter]

Many reasons for weak dollar

1. The US is at war (uncertainty is bad for currency)
2. US deficit is more than 3% of GDP (we wouldn't be able to get in the Eurozone)
3. Huge trade deficit (keep sending our money out then people sell it to convert it to their currnecy and the FX market gets flooded with dollars causing an excessive supply decreasing price)
4. Fed Funds Rate is at 1% only japan and swiss have lower rates and their currencies are weaker than ours
5. The assholes in DC are keeping the dollar weak to encourage exports increasing companies sales to international markets (this is contradictory to our so-called "strong dollar policy")
6. stock markets become an attractive investment from foriegn nations thus providing more money to the financial service industries in our country

basically..... we need to end the war, erase the budget deficit, reduce the trade defict (or slow it) increase the over night rate, and hope eurodollar trades become more favorable to US reinvestment

Do you have any idea what you are talking about?
Lets start with any "uncertainty" about the future of the US relating to War. lol. The Dollar is still the world currency, and no one is afraid of the US going under any time soon.

The dollar is not weak, but on the contrary, being held too high according February 7th's issue of The Economist, for reasons including but not limmitted to those actions of those "assholes" in The Fed, China and Japan.

 

[The Wenis]

Do you have any idea what you are talking about?
Lets start with any "uncertainty" about the future of the US relating to War. lol. The Dollar is still the world currency, and no one is afraid of the US going under any time soon.
QUOTE]


not uncertainty about the outcome. uncertainty about cost of the war in $ and lives, uncertainty about consumers' reactions to it, uncertainty about oil and gas prices because of it....etc.

 

[the nature boy]

euro's taste better than dollars.


HEYYYYYYOOOOOOOOOOOOO!!!!

 

[bluepeter]

Do you have any idea what you are talking about?
Lets start with any "uncertainty" about the future of the US relating to War. lol. The Dollar is still the world currency, and no one is afraid of the US going under any time soon.

The dollar is not weak, but on the contrary, being held too high according February 7th's issue of The Economist, for reasons including but not limmitted to those actions of those "assholes" in The Fed, China and Japan.

I don't know dude, I thought he was about right on....

 

[the nature boy]

Do you have any idea what you are talking about?
Lets start with any "uncertainty" about the future of the US relating to War. lol. The Dollar is still the world currency, and no one is afraid of the US going under any time soon.

The dollar is not weak, but on the contrary, being held too high according February 7th's issue of The Economist, for reasons including but not limmitted to those actions of those "assholes" in The Fed, China and Japan.

can you post that link? the dollar is getting weaker due to increased deficit spending and increased national debt.

 

[gonelifting]

" 5. The assholes in DC are keeping the dollar weak to encourage exports increasing companies sales to international markets (this is contradictory to our so-called "strong dollar policy")"

This was my argument a while back... and 2Thick trounced on me for saying it. Where you you then to back me up bro. lol It`s all about the market now.

 

[out_at_sea]

Maybe Atlantabiolab who seems a smart fella have some thoughts regarding this topic.....

Last I heard the dollar is being kept lower than Euro _ on purpose _to increase US export.....

 

[the nature boy]

Maybe Atlantabiolab who seems a smart fella have some thoughts regarding this topic.....

Last I heard the dollar is being kept lower than Euro to increase US export.....

that may be true. But I'm pretty sure we import more than we export, so this wouldn't make sense. The dollar is low because we are printing more and more money.

 

[anthrax]

The dollar is low because we are printing more and more money.

No

A low dollar against euro =

More exportations
Less importations
=> good for the US economy
=> good for US jobs

 

[the nature boy]

No

A low dollar against euro =

More exportations
Less importations
=> good for the US economy
=> good for US jobs

I was merely explaining why the dollar was low, not the costs/benefits of the the low dollar vs the euro.

I would like to add to your point, while maybe it's good to have a weak dollar for US exports, we IMPORT than we export. Meaning we have to pay MORE for exports, like cars, TV's, clothes, etc.

and to whoever said the dollar was strong vs the euro, the Economist said that is NOT the case.

http://economist.com/finance/displayStory.cfm?story_id=2459841

 

[anthrax]

We should take into account the very low US interest rates

 

[out_at_sea]

I was merely explaining why the dollar was low, not the costs/benefits of the the low dollar vs the euro.

I would like to add to your point, while maybe it's good to have a weak dollar for US exports, we IMPORT than we export. Meaning we have to pay MORE for exports, like cars, TV's, clothes, etc.

and to whoever said the dollar was strong vs the euro, the Economist said that is NOT the case.

http://economist.com/finance/displayStory.cfm?story_id=2459841

Just read thru your link......and this caught my atention:"But it came to an end in 1971, when inflationary pressures in America caused the country's manufacturers to become uncompetitive and forced the country off the gold standard. Since then the world has relied on “fiat money”, so-called because it is created by government fiat and is backed only by the promises of central bankers to protect the value of their currencies. It is the value of those promises that some are now questioning. "

So no longer the mighy dollar is being backed up by gold?

I wonder if other countries' currency is still being backed up by gold.....

Any finance people with some insight?

 

[Robert Jan]

bit simplistic thinking here.

logically its cuz euro bills come in all pretty colours, and dollars are all green

 

[Apöllo]

Any of you guys ever see Die Hard with A Vengence? That movie had a lot of gold in it.

Anyways, the dollar is low to help exports plain and simple. They're letting it "naturally" fall. Now if only China, Japan, and India would "naturally" let their shit raise up!

 

[collegiateLifter]

can you post that link? the dollar is getting weaker due to increased deficit spending and increased national debt.

actually the real article you want comes from the Feb 7 edition of the magazine called "Let the Dollar Drop" but that is 'premium content' so you'd have to pay for it or go through an university to legitimately access it.

 

[the nature boy]

actually the real article you want comes from the Feb 7 edition of the magazine called "Let the Dollar Drop" but that is 'premium content' so you'd have to pay for it or go through an university to legitimately access it.

did you read the article I posted above from the same magazine?

 

[collegiateLifter]

did you read the article I posted above from the same magazine?

its interesting and i know theres a bunch of guys here who are angry about the lack of a gold standard, but it doesn't really address the current state of the dollar in depth. BTW some people would argue that the dollar is todays "gold" but perhaps not for too much longer.

 

[bigschweeler]

...to address the trade imbalance. A weak dollar makes US goods cheaper to purchase overseas. In order to even out the trade imbalance the dollar is manipulated to inch lower against the euro and other currencies. Hence the price of gold has gone up. Usually the US dollar is the foundation for all other currencies, but when it slips there is an increase in gold as it is seen as a back-up for currency.