$ versus €

The current rate of the euro versus the greenback is 1.21. The rate has only been this low twice since 2011. Some banks are predicting a rate of 1.18 by mid 2015 however I think this could be surpassed quite easily given the difficultly in the euro zone and the strength of the US economy. I’d be surprised if US interest rates did not start to tick up next quarter.

Any armchair economists on here like to give their views on this? Is parity a possibility? A sustained low rate would be very interesting.

I have no idea, but I’ve seen Daniel Plainview on here say that it will go all the way to parity.

Watching the slide this year, I wish I’d bought some US equities. I also wish I hadn’t converted over $3m to € in the last couple of years. :frowning:

Arguably the euro has been too strong in recent years. 1.21 is around it’s launch rate at the start of 2002. It then fell back for a few years against the dollar to near parity. Hardly end of the world stuff.

It’s not just the €

Energy-rich Turkmenistan devalues currency against dollar - → news.yahoo.com/energy-rich-turkm … 15064.html

Soaring US dollar pummeling firms that issued greenback bonds instead of local currency debt: - → twitter.com/IanTalley/status/55 … 64/photo/1

January 2002 euro1.00 : $0.89

This time last year I recall a lot of analysts were expecting it to go $1.16 - $1.20 based on Europe engaging in QE alone and not that much expectation of the $ being as strong as it was due in the end to the near end of QE and rate hike expectations. It dropped to $1.20 this morning based on a Draghi QE comment. Recent articles below in the FT on the $. Google article title as presume it is behind paywall. I had a bunch off cash in US$ and flipped from $ to Euro and back etc more out of boredom and feeling screwed by the banks and have done a lot better than any deposit rates and having it stuck in either currency for a long period didn’t pose that much risk to me (with the expectation that the euro would always fall back).

ft.com/intl/cms/s/0/e80cee40-83ea-11e4-9a9a-00144feabdc0.html?siteedition=intl#axzz3NaLdKbhv

ft.com/intl/cms/s/0/e80cee40-83ea-11e4-9a9a-00144feabdc0.html?siteedition=intl#axzz3NaLdKbhv

reuters.com/article/2015/01/ … HE20150102

Merkel ally urges ECB not to buy struggling states’ bonds

Draghi hints EU may be about to suck on some QE, just as US is letting go. Oops!
Just as well that Americans don’t fret too much over whether the $ is strong or weak.

Hi,

Just wondering about the chances of a Euro revival should the ECB cut Greece loose.
Does it not stand to reason that it would rally strongly against the dollar if that level of toxicity were out of the equation.

Thoughts.??

Greece GDP is US$241.72 billion, the Eurozone is US$18.451 trillion, someone can work out the fraction. A Grexit may be seen as cauterizing a wound but it’s a relatively small wound, letting Greece go can also be read as a failure of the Euro project’s raison d’être.

Agree with DD. Don’t think so. Greece like Ireland is a small player, a tail unable to wag the dog. While there are both political and economic components to the issue, It’s the fundamentals in the big economies that mostly drive the dynamic.

Thanks, makes sense when put in those terms.

Will this cause problems if the price of oil rises again?

Yes, big time, if oil recovers to the levels seen last spring we could be looking at €1.70 or more a litre. :sick:

This is a regret I would love to have …

back there right now
1.1783 last
1.1763 low

Will QE accelerate the downward pressure on the Euro ?

No expert, but I’d say it’s already factored in. If deflation takes hold in Europe, well… However, how long can US remain immune from dead Europe and Japan and sluggish emerging markets?

Predicting f/x movements is a mug’s game imo but I bought a decent amount of USD in Nov @ 1.26 (just luck) 8DD

businessinsider.com/afp-weighing-the-costs-for-europe-if-greece-exits-the-euro-2015-1

remember that if Greece goes then you almost certainly lose Cyprus too; at that point your risk will be that Portugal watches them both improve economically and snaffle the holidaying Europeans with their weaker currencies… Portugal likely to become the ultimate make/break of the Euro.

Personally, I don’t think so. Things can’t really get much worse for Greece, they owe the money anyway and it’s patently absurd to think they can turn their economy into a model of teutonic obsession ergo it’s absurd to share a currency with a dominant German overlord. With a Drachma Greece will own the tourism market in short order and begin to, finally, recover. I agree though, it’s not going to be fun & games for a long time either way!