EUR might drop below USD

[tee-rex]

I recently found this article:

http://fortune.com/2015/07/17/summer-vacation-europe-cheaper/

At the moment, one greenback is worth about 90 cents. It came within a few cents of parity this spring, and more economic turmoil could push it back in that range this August

Vacations and European products are already cheaper than ever. You should consider taking advantage of that and book a vacation or buy a European car, especially if it hits parity.

That may be true but the article doesn't mention the effects of that on the American economy. Not on the short or medium term. People taking vacations in Europe may spend a lot less. But as the previous post says a strong dollar makes it harder to export. A strong dollar with a low euro makes Europe much less likely to import American goods and using American services. The relatively weak recovery America has been feeling may be badly affected if parity is reached.

How much do the Europeans actually import from the US? What is their trade balance distribution by country? I thought the main American exports is debt, and a strong dollar makes the US debt even more appealing to those who hold it.

[Gronthaing]

I recently found this article:

http://fortune.com/2015/07/17/summer-vacation-europe-cheaper/

At the moment, one greenback is worth about 90 cents. It came within a few cents of parity this spring, and more economic turmoil could push it back in that range this August

Vacations and European products are already cheaper than ever. You should consider taking advantage of that and book a vacation or buy a European car, especially if it hits parity.

That may be true but the article doesn't mention the effects of that on the American economy. Not on the short or medium term. People taking vacations in Europe may spend a lot less. But as the previous post says a strong dollar makes it harder to export. A strong dollar with a low euro makes Europe much less likely to import American goods and using American services. The relatively weak recovery America has been feeling may be badly affected if parity is reached.

How much do the Europeans actually import from the US? What is their trade balance distribution by country? I thought the main American exports is debt, and a strong dollar makes the US debt even more appealing to those who hold it.

Europe is maybe the second largest export market for the US. Mainly Germany, the UK and Netherlands. Trade between the US and Europe totals over a trillion dollars. A little less than half is American exports. So a small deficit in goods but it actually has a surplus in services. All that will be affected by a strong dollar and weak euro.

[randy8777]

The crisis in Greece affect the euro very much. If the problem is not solved in near time or if Greece doesn't leave the European Union than the euro will drop. That is the reason why the union has to do something about this

the european union will do everything to keep greece inside. if that means giving them more billions that they will never get back, then they will still do it. if greece leave the euro and it turns out to be great for them, then other countries may decide to leave as well. stakes are way too high.

[tyz]

41 days to go until the Fed will decide whether to increase to interest rate or not. if the rate increases - probably to 0.25% - then it is very likely that the Euro breaks the parity to USD and even drop below.

[greBit]

The crisis in Greece affect the euro very much. If the problem is not solved in near time or if Greece doesn't leave the European Union than the euro will drop. That is the reason why the union has to do something about this

the european union will do everything to keep greece inside. if that means giving them more billions that they will never get back, then they will still do it. if greece leave the euro and it turns out to be great for them, then other countries may decide to leave as well. stakes are way too high.

The reasons for Greece to leave are far more better for Euro than them to stay. Greece will no more be a financial liability, A Greek exit demonstrates that the entire Eurozone will not be held hostage be a trivial small irresponsible partner. It will also set an example for other countries, Perceive the situation as Greece being a bad kid who got kicked out for being a bad boy. The only reason Greece has been a failure is because of incompetent Greek public governance.

[umair01]

41 days to go until the Fed will decide whether to increase to interest rate or not. if the rate increases - probably to 0.25% - then it is very likely that the Euro breaks the parity to USD and even drop below.

wow , whats happening all of a sudden to Euro , it was way more than USD before (as far as I can recall) and now I'm reading as what you said that it might get even lower than USD

[tyz]

There is one more factor that could let drop Euro against USD and other currencies. China. Chinese government has bought over one trillion of currency reserves in Euro over the years. Now, the government started to sell a part of the reserves in order to support the current Chinese stock market crisis. if they decide to sell more, then the market got flowed by Euros what causes a higher drop of Euro value.

41 days to go until the Fed will decide whether to increase to interest rate or not. if the rate increases - probably to 0.25% - then it is very likely that the Euro breaks the parity to USD and even drop below.

wow , whats happening all of a sudden to Euro , it was way more than USD before (as far as I can recall) and now I'm reading as what you said that it might get even lower than USD

[mindrust]

I don't know if that's what USA wants but yeah it is probably going to happen. Too strong USD will make things harder for USA too.

Germany and France should have inspected Greece more closely...

[umair01]

There is one more factor that could let drop Euro against USD and other currencies. China. Chinese government has bought over one trillion of currency reserves in Euro over the years. Now, the government started to sell a part of the reserves in order to support the current Chinese stock market crisis. if they decide to sell more, then the market got flowed by Euros what causes a higher drop of Euro value.

but why their trying to sell the money they bought before ? I don't think will do any good to them specially that price of euro is lower than before , it's like something is missing here

[GreenStox]

Not really, the USD is overinflated crap, once the chinese figure that out, they will short all T bonds, and other assets they hold, and then eur/usd might hit 2.0

Of course the EUR credit sector is vulnerable with that high rates, so they will start printing more money, to bounce it back.

I believe the rate will stay @ 1.0

However both currencies will die in hyperinflation.

[Derrike]

In my opinion, usd will never be able to cross euro.
Value of usd is over manipulated and when everyone realize about it, then usd will further go down.

[grendel25]

US still foots the bill of world diplomacy so why shouldn't the USD be the strongest currency?  Maybe when the world finally understands what leadership is some nation other than the US may build a stronger currency.  Until then, I totally wouldn't be surprised to see the USD top the Euro.

[umair01]

In my opinion, usd will never be able to cross euro.
Value of usd is over manipulated and when everyone realize about it, then usd will further go down.

I think both are in a descending order but Euro might have more value drop than USD in the long run so that might be the case for EURO to go lower than USD

[CoinBateman]

This call for parity and subsequent break has too much public eye. It'll never happen.

[Gronthaing]

US still foots the bill of world diplomacy so why shouldn't the USD be the strongest currency?  Maybe when the world finally understands what leadership is some nation other than the US may build a stronger currency.  Until then, I totally wouldn't be surprised to see the USD top the Euro.

Bill for world diplomacy? The US? You mean worldwide gunboat diplomacy right? We can do without that type of leaders. And I don't believe it's in the interest of America to have the USD higher than the Euro for the reasons I said before. The economy will suffer from it. Europe is an important export market for American goods and services.

[BTC_ISTANBUL]

USA Army is the most important American export product for at least 6 decades.As long as the strength of American Army continues, USA will be able to own the most powerful and widely accepted convertable currency on the planet earth.
However, the most powerfull is not related with the USD/EUR parity.Parity is something different.It is about parameters such as inflation , interest , unemployment, etc.

Can 1 USD more valuable then 1 EURO? Why not?  I seen the parity 0.80.

govori srpski da te ceo svet razume

[AtheistAKASaneBrain]

US still foots the bill of world diplomacy so why shouldn't the USD be the strongest currency?  Maybe when the world finally understands what leadership is some nation other than the US may build a stronger currency.  Until then, I totally wouldn't be surprised to see the USD top the Euro.

Well EUR is headed to collapse as well USD, but USD has more resources to keep the scam alive for a longer time. I predict a revolution of some sort by the south european countries that will destroy stability.

[Erdogan]

USA Army is the most important American export product for at least 6 decades.As long as the strength of American Army continues, USA will be able to own the most powerful and widely accepted convertable currency on the planet earth.
However, the most powerfull is not related with the USD/EUR parity.Parity is something different.It is about parameters such as inflation , interest , unemployment, etc.

Can 1 USD more valuable then 1 EURO? Why not?  I seen the parity 0.80.

govori srpski da te ceo svet razume

Currency backed by violence? Nope, doesn't work that way. It is what people, including central bankers, want to hold.

[GreenStox]

It will collapse, the dollar is in bubble, just look at EUR/USD 4 year chart, it has been down, and its time to rebounce.

It's a currency war out there, and the next battle will be lost by the USD.

[n2004al]

It was that fear before when it was not the agreement between Greece and the country of EU. Even because the ECB wanted an euro less strong because the strong euro damages the exports of EU and maintain the inflation less low than necessary. But now all the things are stabilized and this has very few chances to happen. The monetary policies of ECB will continue but i don't think that those will be so drastic that make the value of euro less than the value of us dollar. It is true that us dollar is evaluated those months about 25% but this is the limit of the increase I think.