Euro rising,why?
 

I have been watching the euro rising from a low of $1.18= 1,00 euro. Does anyone know why this is happening? I thought it was going down.

The most likely explanation is random fluctuations, which is to say, no explanation at all. Randomness happens.

In June, the euro was falling partly because countries were voting to opt out of the EU, and things were looking shaky. Maybe that issue has stabilized? Haven't seen coverage of it since we returned to the States.

Even without reading all that info posted above, I know that any increase or decrease of this magnitude (well, on second though, any magnitude)...

... has virtually nothing to do with travel and tourism (as far as the cause of any changes).

It has to do with stuff you and I make every day, and the stuff we buy every day - - and likewise, that <i>they</i> (the Europeans) produce and consume, every day.

Best wishes,

Rex

I read the reason is US structural deficits.

The &quot;best&quot; recent rate for Euros and pounds was right after the July 7 terrorist attacks. I should have run out and bought some (I can do so for a good rate and no extra fees), but that seemed too ghoulish.

Hi swalter518,

Thanks for the info.

May I suggest that in future you just provide a link to the story.

Fodors could get into trouble for allowing copyrighted material on its forums.

((I))

Thanks Ira-didn't mean to cause any problems for Fodors! Sorry!

All the pertinent info notwithstanding, the situation with the euro reflects a continuing drop in investor confidence in U.S. securities. I do believe, though, that its value will stabilize around $1.25. Variations so far, as rex noted, wouldn't affect travel for you and me. A few percent variance in either direction will not cost or save enough for most people to change their decisions on travel.

On a two-week vacation in Europe, considering that air fare isn't normally purchased in euros, an average couple will spend about $2500, though it is possible to spend a lot less or a lot more. If the euro varies by 5 percent, which from this point forward is very unlikely, the expenses would change by 125 dollars. I would venture to say that amount isn't enough to change anyone's mind.

A few weeks ago eveybody was thinking about reasons why the euro was falling, now it's rising. It will be falling again, before it starts rising. The fair exchange rate would be 1.45 to 1.50 US Dollars for one Euro. I predict, well will see rates over 1.40 soon. :-) GO Euro GO!!!

Why is the euro rising? Well, most European Union nations, except Italy, don't have huge budget deficits and they don't have a multi billion dollar trade deficit.

The British pound took a hit because of the bombings in London. The economy is a little stagnant right now and the Bank of England for the first time in 2 years cut the prime interest rate.

My concern is not that the euro is rising, that it hasn't risen more given the international balance of payment conditions.

Logos999, bite your tongue!
$1.40-1.50 is not a fair rate at all, as far as my pocketbook is concerned.
That rate has a much higher ratio than formerly experienced with 'francs'...

I have the answer. It is rising simply because I am traveling soon and had enjoyed watching it fall for awhile.

Currency fluctuations are in many ways similar to stock market fluctuations. Some due to pure speculation, some due to basic economic principles, some due to world trade issues, some due to emotional reactions, some due to political events, some due to &quot;fill in the blank.&quot;

LOL. Yeah ggnga, know this well. Our man Murphy again!

Hi brookwood
&gt;Why is the euro rising? Well, most European Union nations, except Italy, don't have huge budget deficits ...&lt;

In 2004, the French budget deficit was 44 billion E, 3.6% of GDP, the German budget deficit was about 4% of GDP, only 3.2% in Italy.

The US budget deficit was about $480 billion - about 4% of GDP.

((I))

Going north again, accelerating after good results in the Euro zone. On Friday 1.25 will be reached. 1.27 by the end of next week? :-) :-)

Oh, Ira - there you go again ruining perfectly good irrational speculation and ignorant explanations with those darn . . . facts! (and much appreciated, by the way)

Sorry but I don't quite understand the connection between our deficit which didn't exactly start yesterday and the rise in the Euro..perhaps you could enlighten us further. Is the Euro NOT rising in Italy???

All I know is that it was about $1.31 when I was planning our trip early this year, then it fell to about $1.22 in June when we took our trip. A fortuitous break for us. It's the luck of the draw.

It's depressing for me as it's rising against the pound as well. The italian villa I'm buying has gone up about &pound;4000 in the last month. Ow! So much for my new bathroom!