Holy smokes the euro is at 1.48. Not looking forward to spending even more money because of our pitiful dollar but what are you going to do? The dollar sure does seem to be taking a beating though. I wish I had bought more euro before I returned from my last trip. It was at 1. 40 at the time. The lowest if ever got was 1.59 euro. Damn! I hope things get better.

As the dollar weakness against euro is about the fundamentals, it seems like a long-term trend and not likely to be reversed any time soon. Dollar is lower because the interest rate in US is expected to remain very low for a long time with a very loose monetary policy (quantitative easing continuing), perhaps for the whole of 2010 and into 2011, while the Eurozone economy is emerging out of recession before US and there is an active talk of an exit strategy, and a hike in interest rate (Australia raised theirs last week, first Western nation to do so).
How far dollar has still to fall against euro is hard to tell, and it may be that the greenback is heading towards the lows against euro before any bounce back can be expected.

http://www.youtube.com/watch?v=-FqA2WINPF4
Free falling

There'll be better days ahead, hope the total collapse comes soon. Latest news sound ugly. Can't be too long now.

Huh? When we went to Europe 2 yrs ago, the US$ wasn't much different than it is today ($1.40is). But with all the borrowing the US is doing from China, who knows what it will look like next year.

As the dollar weakness against euro is about the fundamentals, it seems like a long-term trend and not likely to be reversed any time soon.

Oh, really? So you can predict the future?

I was in Paris last November and the dollar was $1.23 against the Euro after holding at $1.60 the Spring and Summer of 2008. The dollar made a gain of almost 40 cents in just a few months.

In July, 2007 the dollar was $1.33 against the euro, by Christmas it was $1.44.

I don't think anyone can predict where the dollar will go next.

Thin

Sorry, that should have been $1.40ish.

I have a week long trip coming up in February. Luckily, I have 600 euro saved from my last trip and our lodging 50% paid for. As much as I love Europe, the euro just makes me crazy when it comes to planning and budgeting. This maybe my last trip to Europe for a few years until things get better. Oh hell! That is what I say after every trip to Europe and somehow I end up going back. Portugal is on my list and at least the prices are too bad. Oh Portugal in April 2011 and that's it for a while!

Vries Van Notebook,
I'll make a prediction.

The USD will fall relative to the Euro and the Australian dollar. Right now, one Australian dollar buys about 91 cents US. I expect that in a month, one Aussie will buy about 95 cents US.

Australian inbound tourism operators are starting to complain that the strength of the Aussie is starting to hurt their trade.

If oil starts to be traded in currency other than the USD, then one coud expect the USD to drop significantly against other currencies.

The American economy is starting to recover from the Global Financial Crisis, but the recovery there is slow compared to European and other economies. The American economy will be well served by a low exchange rate - one cause of the GFC was the massive imports into the USA, made possible by a strong USD and excessive bank lendings.

The big question is where the Chinese currency will go vs. the USD.

Todays info:
http://diepresse.com/home/wirtschaft/boerse/514733
http://www.handelsblatt.com/finanzen...fallen;2468685
http://diepresse.com/home/wirtschaft/boerse/514623

"Dollar in havy turbulences"
"Investors drop dollars"
"Who needs Dollars anymore?"

Just a few (three) of todays articles in the german speaking news. Times do change indeed.
Kaputt.

A weak dollar poses its own sets of problems for the Euro zone. As imports from the EU to the USA become more expensive it will result in a slower recovery for the EU, if not more job losses. You can count on more unemployment if the EU raises interest rates more than a hair. A weak Dollar allows for more American exports, but we have so little to export other than some technology and more jobs. That’s what we’ve been good at the last 10 years.

As far as travel goes, Americans will either cut back traveling to Europe, as they did in 2008 and 2009, or spend a lot less while there. We’ve learned to look around carefully with it comes to eating out.

This is not the first time the dollar has been weak. The high last year did inch above 1.60 USD to the Euro, but it was terrible in the early 70's when 1 USD would only buy you 68 Spanish Pesetas. In October 1995 one USD was worth 120 Spanish Pesetas (the Peseta is set at around 168/Euro), or 4.86 French Francs, and 154 Pesetas in 1999, a start to the boom years for American’s traveling to abroad. 2001 was the best year in decades, but the dollar has seen a steady drop in value since then, with some ups and downs, but mostly down. You know it’s really bad when you think that an exchange rate of 1.32 USD to 1 Euro is a good rate, but I’d take it today.

Just remember that today's paltry exchange rate is about where it was in the mid 90's, not good, but not as bad as it was in the 70's. But then again, 1000 Pesetas ($15) went a long way in the 70’s. At least we could afford to eat, drink 1 Peseta wine and rent an apartment in Torremolinos for $2.50/day.

I would hardly say it's free falling. As betty pointed out it hasn't changed that much against the € in the last couple of years. And we're doing a heck of a lot better than before against the £. It wasn't that long ago the £ cost us $2, now it's only ~$1.60. I'm glad I'm not so pessimistic.

I would take 1.32 right now as well. I was in the Azores Islands just last winter when the exchange was just that and things did not seem too expensive. In the long run if you are only in Europe a week or two, the sudden drop does make too much of a difference. But still when you budget a certain amount and then the dollar drops again and again, it certainly becomes annoying.

Thin is right.
The supply and demand changes depending on many
variables. If one could predict the future..
imagine the money that could be made.

I cringe when I think about the EUR-USD exchange rate.

An article from an Australian newspaper, by one of our more respected commentators:
http://www.theage.com.au/opinion/pol...1013-gvs3.html

Though few have noticed, the Aussie's been on a wild ride over the past 18 months. In July last year, at the height of the resources boom, it was up at an amazing US98c, and people were taking an interest, wondering whether it would reach parity with the mighty greenback.

But then the financial crisis intervened and it began a rapid slide, dropping to about US64c in March. In just the seven months since then, however, it's recovered to US90c.

What's going on? Well, remember that the rate of exchange between our dollar and the US dollar is like a seesaw - if the greenback's down, we must be up. And that explains a fair bit of our ride. In the financial panic that followed the collapse of the US investment bank Lehman Brothers, a lot of US investors brought their money back on shore, thus pushing the greenback up and us down.