Euro vs dollar
 

How come no one has posted that "the dollar is rising vs the euro and the pound, so I'm going to Europe"?

It's certainly better. Will it last? I'm going to London this summer and that would be great for us.

It can't go up fast enough as I'll be there in 13 days!!!

Get out ! Is it ?

Numbers please

piffle.
The dollar has gained about 3% in the last couple of weeks.
Compared to its value when the Euro first came out, the dollar has dropped 38%, using today's price of $1.22 per 1 euro. That is not exactly a figure to cause a stampede.

You don't really expect the euro to weaken versus the dollar until our balance of payments becomes less negative do you?
And our national debt drops under the mega trillion mark? Take a look at fiscal reality.

Today, 1 Euro = $1.219

A few weeks ago it was $1.28. Hope this is a positive trend.

barbmike, we are leaving in 12 days for Italy. Can't wait!

>Compared to its value when the Euro first came out, the dollar has dropped 38%,...<

Sorry, Bob, the euro was originally priced at $1.18. That's only a 3% rise.

I think you are comparing it to when the euro had dropped to $0.87.

Lorac1127, what's your Italy itinerary? I'll be in Italy from March 30-April 12th. My first stop is Switzerland for 5 nights in Wengen. Mike

Hi

Confucious say " Never travel with a third world currency !"

Peter

I was just at a speech this morning for the chief economist from the Fannie Mae mortgage group (so take it for what it's worth) but he said that those in the know believe that the dollar will not likely drop any further against the Euro, with the exception of minor fluctuations. He also said that this drop was "long overdue" as the Euro has been undervalued since its inception.

> He also said that this drop was "long overdue" as the Euro has been undervalued since its inception.<

So much for 'experts'. The reason the euro plummeted almost immediately after it's inception was that it was overvalued compared to the national currencies on which it was based.

For example, 2000 Lira were worth less than $1 and 6 FF equalled a dollar in 2001. The euro was set at about 2000 lire and 5 FF and set at $1.18.

It was grossly overvalued.

Not to mention that everybody raised their prices when they switched over.

You call this rising?

This week I had to use Paypal to purchase something by credit card in England and the conversion was $1.87 to 1 pound.

Keith

barbmike, we leave on 3/24 for Naples, then to Montalcino on 3/29 and then on to Venice on 4/3.

Ira,
I believe he meant undervalued in comparison to the dollar, not compared to the currencies it replaced.

swalter, I suggest you quit while you're behind. your lack of knowledge in economics is astounding. it was just explained to you that it was overvalued to the dollar, don't you get it?

I enjoy looking @ www.xe.com frequently for the exchange rate. It has been nice to see the exchange rate improve for the dollar over the last few weeks.

Picking up on an earlier comment, the European currencies underlying the Euro have fixed values compared to the Euro. For example, 1 Euro always equals (rounded) 6.56 French Francs. While that might seem like just a curiousity, it makes it possible to compare relative costs and exchange rates over different periods of time that are both prior to and following the introduction of the Euro. (And as we've often said here before, it's been "better" and it's been "worse", from the perspective of the exchange rate to U.S. dollars.)

OOPs

I erred on the value of the FF.

In Dec. 2001 the conversion rate was 7.36 FF = $1.

The FF was then set at 6.56 to the Euro, with the Euro set at $1.18.

Thus the FF went from 13.6 to 18 cents. The Euro would have to be priced at $0.89 to keep the FF at the price it had been before the conversion.

At the same time the Italian Lira was 2194 to the dollar. It was changed to 1936 = $1.18, a 33% increase.