Euro v. Dollar
 

Has anyone else noticed that the Euro is rising against the U.S. dollar, again! For the last few months we have been around the 1.3 area, but the Euro has spiked today to 1.41. I will be traveling next week for a couple week long vacation to Europe and this currency just keeps kicking our butt! I'm not surprised though, it appears that the global recession has finally bottomed. Is anyone else traveling to Europe soon and is worried about this unstoppable exchange rate. In rather great news, expensive or not, at least I will be in Paris, Barcelona, Rome, and Venice!

I have been watching the exchange rate too - our trip is in August, so the euro has plenty of time to rise against the dollar before our trip. We will see. But like you said, at least we get to go to Europe this year.

Yeah, at first I was both concerned and disappointed, but with all of the recent misfortunes that have recently occurred around the globe the last thing I can do is complain.

Im watching too for our trip in Sept.
We have prepaid most things so that is a relief as I watch the rates rise.

You couldn't have said it any better Jetsetj. Thank god I paid for EVERYTHING when the dollar was at around 1.29! My vacation would have been shorter with the current exchange rate. I bought some Euros when the Euro was low - I should have gone with my instincts and bought more, much more!

Although, you should be fine Jetsetj. By September the dollar should probably be in the 1.3 or better area (very favorably for us). I expect that by then the credit crisis would have eased off - signaling a rise in U.S. interest rates, much sooner than Europe's ECB.

Anyway, cheers to everyone - enjoy Europe!

The € hasn't risen, the € is weak, just the USD is even weaker. It'll be all over soon, but who cares.

Big jump in the rate today. I think the euro went past 1.41.

At the end of the day, there were also plenty of people screaming that you should buy EUR when it was at 1.5. The fx rate will fluctuate. For the average vacationer, your best bet is to just cross your fingers and hope you get lucky.

If changes in the fx rate are the make or break for your vacation, then you shouldn't be making the trip in the first place. And if those changes aren't make or break, then don't lose sleep over it.

I have never speculated before a trip. I have been disappointed by the final result as often as I have been pleased.

I hit the jackpot in Canada and Thailand once, but I also got screwed on the rate in France and Hong Kong once.

It is better to just be philosophical and determine how piddling the exchange difference is for the things you are paying for (assuming you are not buying diamonds, luxury cars or 5-star meals at every restaurant).

<i>It'll be all over soon, but who cares</i>

As a famous economist once said:

"In the long run, we're all dead"

I agree. I never thought that it was going to go down to 1.3 again. FX rates to fluctuate. Of course, one always hopes to get a good exchange rate :)

Well the exchange rate is not going to make or break my vacation, but being 21 year old college student, money isn't exactly growing on trees for me.

"In the long run, we're all dead"
And this was to justify that mountain of debt.
But then, dead people don't need to care about their debt anymore. Neo-con or liberal, there's no difference, they all love Keynes and will never pay back anything.

The $ is history soon, and we were there when it happened.
Happy about it? Where were you when Kennedy was shot?, when the wall came down?, Armstrong set foot on the moon?, the USD collapsed?

Soon in this theatre.

Now, now, it won't be history for several years yet, but since the Chinese and Indian economies will be dominant within 10 or 20 years, it is indeed time to start thinking beyond the dollar.

Continental currencies like the euro or the upcoming Middle Eastern currency are probably models for what the Americas should think about.

It will be sooner than everybody thinks. It's on life support now, with the long term interest up by 0.5% every 10 days. Yet noone seems to care (know?). Anyway I sit and wait, hope everyone's prepared. Given the experience last Sptember when we were just hours away from empty ATMs everywhere, I wouldn't trust what any politician has to say today. They were just lucky that time, they can't always be lucky.

logos999 you have been posting on the demise of the USD for at least 2 years, when will you quit!

Soon!!! It'll soon be over.

<i>since the Chinese and Indian economies will be dominant within 10 or 20 years</i>

I think one should have a healthy respect for just how poor both of these countries are. India, especially, is something of a basket-case. Are these important countries? Yes. Do they have a long way to go before they approach the GDP per capita of some place like Peru? Absolutely, India especially. There are a lot of obstacles left before either country becomes as dominant as people already think they are.

Mexico has a GDP per capita that is more than double China's, but the country is something of a basket case. Why assume that China will own the world within 10 years? I'm a pretty young guy - in my early 30s - yet I am still old enough to remember more than one country having been offered as the country that will overtake the US. I have heard these scare stories about Japan, Mexico, Brazil, Russia, Germany, and others too many times to believe them now that the next big thing is China and India.

<i>Given the experience last Sptember when we were just hours away from empty ATMs everywhere, I wouldn't trust what any politician has to say today.</i>

Hours from empty ATMs? Germans have never had much perspective. It is why nobody takes Merkel seriously. Things were never as bad as you seem to think. And, if they were, we would all be doomed, whether holding dollars, euros, yuan, or gold.

"I'm not surprised though, it appears that the global recession has finally bottomed."

Completely untrue, and what's it got to do with the US dollar exchange rate?

All that's happened in the past six months is that we've seen the possibility of complete financial collapse - and probably averted it. But some big businesses are still going bust, and many, many more are laying people off. Unemployment's rising throughout the developed world, and we're light years away from seeing it stop rising. The recession won't bottom out till demand stops falling - though stock markets might go positive earlier, because aggressive cost-cutting can make businesses more profitable even while their sales fall.

The process is fundamentally the same in the US and the Eurozone (and in Britain, Japan and Switzerland) It scarcely affects the value of the US dollar on the world's markets, which is the result of aracane issues about interest rates, quantitative easing and whatever fad of the week is preoccupying the boys and girls on the forex desks.

Since the US $ and the € (and the £) are profoundly linked, and the traders just a bunch of thrill-seeking gamblers, their relative rates will - as long as everyone on this board is alive - go up and down against each other as often as a whore's knickers when the boats dock. And a lot less predictably.

There's simply no point speculating (except professionally) about this. No-one's got the foggiest idea what the rates will be in a month or so and they're always as likely to move in your favour as against you.

And anyone predicting anything but unpredictablity is simply a loudmouth ignoramus.

There will be a (Hyper-)Inflation that will hit the USD first. This will comw to a surprise to some totally ignorant folks. And they will scream on this board, "How could it happen, my pension, my home, my MONEY". The US will of course never be technically bancrupt, can't be, they print the $$$, as many as they like. And they like a lot at 0% interest.

Anybody who has seen the estimates of M3 (no this is not a road in the U.K :D ) will realize that it's the only outcome.

And if it's only 40% every year for 5 years, the results are the same. You only print money and get away with it for a certain time.

The "end" is closer than expected. It's the same mechanism that has worked in Argentina, Germany and all over the planet. Devalue your currency and get rid of debt.

After the collapse, it'll be hardest for many, but then the world will see considerably less theft from the US (and others) around the planet. No more free merchandise, an army that is paid for entirely by other nations, and actually americans will have to pay for their gas.

That's going to be fun..., or maybe not if you're affected.