U.S dollar almost equal to Euro

[Ultegra134]

After several weeks of the exchange rate of EUR/USD trending at $1.02, today it crashed even further and practically achieved 1:1 parity. It's currently at $1.0037/€ and wouldn't be surprised if it went even further below. A few weeks ago, some users mentioned that we could also see Euro falling below $1 but many of us thought that it was too extreme. I hope we're not proved wrong.

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[Poker Player]

After several weeks of the exchange rate of EUR/USD trending at $1.02, today it crashed even further and practically achieved 1:1 parity. It's currently at $1.0037/€ and wouldn't be surprised if it went even further below. A few weeks ago, some users mentioned that we could also see Euro falling below $1 but many of us thought that it was too extreme. I hope we're not proved wrong.

Today it went down breaking parity. A moment ago it was at $0.98 per euro.

We will see how it turns out. In principle, many things will be more expensive for Europeans in the Euro zone, starting with the fact that raw materials are paid in dollars and this has repercussions on the rest of the chain.

As in everything else, those who have investments will be spared or will not notice it so much, because apart from the fact that well-made investments give returns higher than inflation, those who have a fund indexed to the S&P 500 or the MSCI World will benefit from this rise of the dollar against the euro.

[pooya87]

After several weeks of the exchange rate of EUR/USD trending at $1.02, today it crashed even further and practically achieved 1:1 parity. It's currently at $1.0037/€ and wouldn't be surprised if it went even further below. A few weeks ago, some users mentioned that we could also see Euro falling below $1 but many of us thought that it was too extreme. I hope we're not proved wrong.

The more countries that dump US dollar as trade/reserve currency the more Euro is going to dump! It's based on the fact that dumping US dollar sends back trillions of dollars that were printed without anything backing them that will cause high inflation and weaken US dollar.
But they were sneaky enough to find ways to export that inflation, where is better than Europe to export it hence the dumping Euro.

On top of that we have Europe's economy that depends on energy prices being low and their services being bought. Energy prices are rising and they are losing customers for their service-based economy. Obviously Euro loses value.
1 more month and the temperature will start dropping too while energy crisis worsens in Europe. We can easily expect a much lower exchange rate.

[Ultegra134]

After several weeks of the exchange rate of EUR/USD trending at $1.02, today it crashed even further and practically achieved 1:1 parity. It's currently at $1.0037/€ and wouldn't be surprised if it went even further below. A few weeks ago, some users mentioned that we could also see Euro falling below $1 but many of us thought that it was too extreme. I hope we're not proved wrong.

Today it went down breaking parity. A moment ago it was at $0.98 per euro.

We will see how it turns out. In principle, many things will be more expensive for Europeans in the Euro zone, starting with the fact that raw materials are paid in dollars and this has repercussions on the rest of the chain.

As in everything else, those who have investments will be spared or will not notice it so much, because apart from the fact that well-made investments give returns higher than inflation, those who have a fund indexed to the S&P 500 or the MSCI World will benefit from this rise of the dollar against the euro.

Are you sure about that? I searched for a while, but can't find a point where it reached $0.98/EUR. It seems to be falling slow and steady, if it continues like this, it won't take long to reach $0.98/€. It's currently trending at $0.9916/€, while previous user's predictions about reaching $0.90 - $0.95 sound way too realistic now. If that happens, we're bound to see an increase in fuel again, which will spark an additional row of price increases to everyday goods, boosting inflation once again.

[LoyceMobile]

The euro made big news in July 2022 when it fell to the same value as the US dollar for the first time in two decades. It hasn't recovered much -- after an expected dip of the dollar on Aug. 12, one euro is still only worth $1.03. That's down from $1.18 at the end of Aug. 2021, or a 12.7% drop.

I count a $0.20 drop since September 5, 2021 (from $1.19 to $0.99).

Meanwhile, the interest in the EU is still 0.00%. Central banks deliberately destroy the value of the euro to keep the southern countries afloat, which isn't their mandate.

The primary objective of the European Central Bank, set out in Article 127(1) of the Treaty on the Functioning of the European Union, is to maintain price stability within the Eurozone.

[zbutterfly]

It's terrible. 1 dollar is almost the equivalent of 1 euro, because of the recession. The European Central Bank (ECB) has raised its key interest rate. After the first 0.5 percentage point move in July, more will follow. That was thought to reduce the effects of the recession, however, the immediate effects of a rate hike were not felt, according to IW. On the other hand, the ECB's intervention may even increase the risk of a recession. "Stagflation is a real risk in Europe," this will continue, if covid and this war passes maybe the recession in Europe will ease.

[LoyceMobile]

That was thought to reduce the effects of the recession

The opposite is true: increasing interest will increase the chance of a recession. But negative interest isn't normal, and so are recessions. What's not normal, is devaluating your currency and continuously "stimulating the economy".

[takuma sato]

We've had negative interest for years, you would make money by getting into debt. This was never even acknowledged in economy books. If you went to college, teachers wouldn't teach you about this ever happening. It has happened for the last decade. Now we are going to get into a recession since they will have to go into higher interest rates. The more they delay the interest hikes, the more brutal the crash. If they do it slowly, it will be a long term recession. I think we may see a rise on the SP500 since they are scared to raise the rates. This will make the investors confident, and thus will create a massive crash. Michael Burry is right, we haven't capitulated in my book.

[Hispo]

The euro made big news in July 2022 when it fell to the same value as the US dollar for the first time in two decades. It hasn't recovered much -- after an expected dip of the dollar on Aug. 12, one euro is still only worth $1.03. That's down from $1.18 at the end of Aug. 2021, or a 12.7% drop.

Meanwhile, the interest in the EU is still 0.00%. Central banks deliberately destroy the value of the euro to keep the southern countries afloat, which isn't their mandate.

Would you care to explain what you mean by this? specially the part of  "southern countries", since I am not informed enough on the economic policies within the European Union, I just get a look at the news.

Also, I thought there was a plan or the possibility to increase the interest rate in Europe was being discussed, since USA is already doing it in hopes to decrease their inflation rates, it sounds almost reckless the Eurozone is not doing something so their currency can remain competitive.

What am I missing?

[LoyceMobile]

Short version: ECB can't increase the interest to the level it should be, because countries in the south wouldn't be able to pay their debts and risk bankruptcy.

[Sithara007]

Short version: ECB can't increase the interest to the level it should be, because countries in the south wouldn't be able to pay their debts and risk bankruptcy.

LOL.. the EU at this point reminds me of the USSR of late 1980s. The real reason why the USSR collapsed was that the "parasite" states such as Tajikistan and Uzbekistan grew in population and demanded more funds and resources from the productive states such as Russia and Belarus. EU is in a similar situation. Countries with budget surplus, such as Germany and Netherlands are funding less productive states such as Poland and Greece. And now the issue is that Germany will no longer have a budget surplus, thanks to their stupid policies in the Russo-Ukrainian war. 

[LoyceMobile]

LOL.. the EU at this point reminds me of the USSR of late 1980s.

There's a reason it has been called EUSSR by many people (including theymos).

[stompix]

The real reason why the USSR collapsed was that the "parasite" states such as Tajikistan and Uzbekistan grew in population and demanded more funds and resources from the productive states such as Russia and Belarus. EU is in a similar situation. Countries with budget surplus, such as Germany and Netherlands are funding less productive states such as Poland and Greece.

I love when the guy that claims a month has 40 days and 3x7 is 30 is suddenly after being a military, politics, master historian turns to be an expert on EU economics. Of course even more amusing is that the only people really concern with these are the ones not living in the EU, and strangely rather than focusing on their own country they find fault with others, so let me get this right for you

India has exported $418 billion for the first time in its history. This is more than the target.

Poland exports for 2021 was $410.54B, a 22.47% increase from 2020.


So this parasitic less productive state of Poland with just 40 million people has managed to produce and export more than the whole of India. Now, looking at the 1:30 population ratio, how would you call "productivity" in India?

There's a reason it has been called EUSSR by many people (including theymos).

I find it interesting that most of the ones calling it like that are the ones that have never actually lived a second in the actual USSR.  
The ones that did know this is just bs.

[Poker Player]

Are you sure about that? I searched for a while, but can't find a point where it reached $0.98/EUR. It seems to be falling slow and steady, if it continues like this, it won't take long to reach $0.98/€.

It was a mistake. It was like 0.9908 or something and I miswrote it.

Meanwhile, the interest in the EU is still 0.00%. Central banks deliberately destroy the value of the euro to keep the southern countries afloat, which isn't their mandate.

No. The interest in the EU is 0.5%. I'm surprised you would say that, but at least it shows that you are human and make mistakes too. Or maybe it's your mobile alt, which is not so focused.

https://tradingeconomics.com/country-list/interest-rate?continent=europe

Eurozone raises interest rates for first time in 11 years

There's a reason it has been called EUSSR by many people (including theymos).

I find it interesting that most of the ones calling it like that are the ones that have never actually lived a second in the actual USSR. 
The ones that did know this is just bs.

Yes, of course, that's an exaggeration, but I think you and I have pretty similar ideas about economic policy, although I don't think the EU's regulatory voracity is the best way to stimulate business and economic growth. I see it as very socialist, although Europe has always been more social democratic than the US for example (at least since the end of WWII).

I would not call the EU Bolshevik, but it is quite socialist.

[be.open]

Meanwhile, the interest in the EU is still 0.00%. Central banks deliberately destroy the value of the euro to keep the southern countries afloat, which isn't their mandate.

No. The interest in the EU is 0.5%. I'm surprised you would say that, but at least it shows that you are human and make mistakes too. Or maybe it's your mobile alt, which is not so focused.

https://tradingeconomics.com/country-list/interest-rate?continent=europe

Eurozone raises interest rates for first time in 11 years

The increase in the key rate was carried out as part of the fight against inflation, but the problem for the euro is that it does not work that way. If you want to curb inflation, you must first raise the key rate sharply to a level above the current inflation rate, and then implement a series of key rate cuts to stimulate the economy. And if you smoothly raise the key rate by a value that is obviously an order of magnitude smaller than the current inflation rate, then you only stimulate stagflation, that is, inflation growth against the backdrop of a decline in business activity. You don't need to graduate from the Higher School of Economics to understand this.

[LoyceMobile]

Meanwhile, the interest in the EU is still 0.00%. Central banks deliberately destroy the value of the euro to keep the southern countries afloat, which isn't their mandate.

No. The interest in the EU is 0.5%.

No it's not It's literally in your own link:

Eurozone raises interest rates for first time in 11 years

The ECB increased its key interest rate by 0.5 percentage points to 0.0% and plans further hikes this year.

That means the interest went from -0.50% to 0.00%.

I find it interesting that most of the ones calling it like that are the ones that have never actually lived a second in the actual USSR.  
The ones that did know this is just bs.

Yes, of course, that's an exaggeration, but I think you and I have pretty similar ideas about economic policy

I think the term "EUSSR" comes from the EU striving to become bigger and more powerful, trying to decide everything. They don't seem to care about what people vote, and go their own way anyway. And they have a long history of taking really good care of themselves, up to the point where they only showed up at work to collect their daily allowance. Those things don't look good when it hits the media.

The increase in the key rate was carried out as part of the fight against inflation, but the problem for the euro is that it does not work that way. If you want to curb inflation, you must first raise the key rate sharply to a level above the current inflation rate

In the media, they call the increase to 0.00% a really strong effort to fight inflation. That says it all, it's ridiculous!

[be.open]

The increase in the key rate was carried out as part of the fight against inflation, but the problem for the euro is that it does not work that way. If you want to curb inflation, you must first raise the key rate sharply to a level above the current inflation rate

In the media, they call the increase to 0.00% a really strong effort to fight inflation. That says it all, it's ridiculous!

What else is there to do but believe in the power of verbal interventions? A sharp increase in the key rate to the level of inflation will be a disaster for Greece and Italy in particular and for the European Union as a whole.

[RealMalatesta]

Short version: ECB can't increase the interest to the level it should be, because countries in the south wouldn't be able to pay their debts and risk bankruptcy.

LOL.. the EU at this point reminds me of the USSR of late 1980s. The real reason why the USSR collapsed was that the "parasite" states such as Tajikistan and Uzbekistan grew in population and demanded more funds and resources from the productive states such as Russia and Belarus. EU is in a similar situation. Countries with budget surplus, such as Germany and Netherlands are funding less productive states such as Poland and Greece. And now the issue is that Germany will no longer have a budget surplus, thanks to their stupid policies in the Russo-Ukrainian war. 

I mean they are trying to build a whole union from many different nations and cultures into just one system... wouldn't be really weird to see them as USSR because that is literally what they did as well. Look at all the nations USSR had under its banner at that point and see that we are talking about way too many different type of people and cultures all under the same flag which caused the turmoil and problem eventually.

Same goes with Europe, Germany has done very well, Greece hasn't, that much is known globally right? Well there are many that did well and many that did poorly not just those two and the idea to stay together can't work like that.

[LoyceMobile]

What else is there to do but believe in the power of verbal interventions? A sharp increase in the key rate to the level of inflation will be a disaster for Greece and Italy in particular and for the European Union as a whole.

Now they're just delaying the inevitable, while the low interest and high inflation are damaging the economy, savings and pensions. I'd much rather rip off the bandaid, get rid of zombie companies that can only exist with low interest, and rebuild a stronger economy from there.

[nicolas1979]

For the first time in 20 years, the U.S. dollar has been surging so much that the Euro sinks towards parity with the Dollar, currently trading at €1/$1.01, being almost equal. This is a threat to both Europe and USA, since imports are now much more costly for Europe. The exchange rate is also driving oil prices up, since purchasing a barrel of oil valued at $100, now costs €98-99 for Europe, while a few months ago, the same barrel would cost €80-90 at most.

Goldman Sachs warned that the Eurozone is on the edge of recession, especially with Russia's decision to cut CNG supplies to Europe, resulting in huge surges in prices.  While the war in Ukraine hasn't affected USA as much as it has Europe, it has magnified oil and gas prices, punishing European consumers with the surging living costs.

What are your thoughts? Will Euro's value fall lower than the U.S. Dollar? One thing is certain though, we're going to go through a tough time in the very near future.
Sources:
https://fortune.com/2022/07/07/us-dollar-euro-nearly-equal-value-economy-inflation/
https://www.ft.com/content/48c7041f-1fa4-42ee-99f6-4a5955668fb6

Edit: Thanks LoyceMobile, I meant to say that U.S. exports are much more costly for Europe, bad phrasing.

I think a recession has occurred in the EURO currency, which was previously well above the USD price. If Russia's war with Ukraine continues, there is a possibility that some countries will experience inflation. In this case, the US is in a safe position, because they have a strong economic resource through trade in war weapons. While Russia is also in a safe position, they have a source of income from oil sales. What about countries - countries that depend on other countries. Maybe the third world war hasn't happened yet, but it's already in the discourse. So that the economic crisis will continue to occur, and the world community will become victims of the political games of several countries.