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> The dollar is stronger today than it has been in 20 > years As far as I remember the US Dollar was about 1.25 the value of the Euro at it's peak in 1999/200

> The dollar is stronger today than it has been in 20 > years As far as I remember the US Dollar was about 1.25 the value of the Euro at it's peak in 1999/2000. We traded in dollars at the time.

adventured 11y ago
The Yen was a credible currency in 1995, and it's now in much worse shape (both today and its outlook). The Euro was widely expected to pose a challenge to the dollar globally, which has not happened at all. The dollar is as strong as it is even with 0% interest rates. Imagine if rates were even half the levels they were 20 years ago. I'd definitely make the argument the dollar is stronger today than it has been since the late 1990s when the US economy was riding very high. In the next few years, most likely the dollar will gain more strength (the US budget is currently under control, growth is ok, and the employment picture continues to strengthen spurring tax growth), the Euro will be debased with more QE in mostly futile attempts to spur Eurozone growth, and the Yen will lose a lot more value. The Yuan is also likely to face significant devaluation as China struggles to grow in real terms, but it will at least see greater global share. Things are looking great for the dollar at least for the next ten years.
- the-dude 11y ago
  > The Euro was widely expected to pose a challenge > to the dollar globally, which has not happened at all. The dollar was trading at about 0.75 to the Euro around 2009. What is a challenge in your eyes? Anyway, these are just opinions ( yours and mine ). Mine: no US rate hike in the foreseeable future, QE4.
  - adventured 11y ago
    The Euro has acted as a strangling device for everyone in the union not named Germany. For Germany, it has enabled them to ride an artificially cheaper currency with their exports (were they using their own currency, it would be far more expensive). For Italy, Spain, Portugal, Greece etc, the currency held them back by being even more expensive than their own currency would have been; for eg Finland, it has prevented them from making adjustments to become more competitive on numerous cost structures. The end result has been eight years of no net economic growth (and in recent dollar terms it's now far worse than that). The lack of Eurozone growth will spur more QE for years to come. The US is presently done with its QE program, and there's nothing on the horizon that indicates it'll need to return to that in the next several years (large budget deficits would cause that, but so far Congress isn't growing spending in an out of control manner). That context will push the Euro lower, and the USD higher versus. Until the Eurozone can show off serious growth (not 0.3%-0.5% type 'growth'), rapidly improving household balance sheets, and a significantly improving employment picture (not 11%), the Euro will struggle.
    - the-dude 11y ago
      You are absolutely right!
    - tormeh 11y ago
      You're mostly right, unpleasant as that is in this case. One thing's wrong though: The ECB doesn't really have to care, and historically haven't cared, about growth and unemployment. The ECB is printing money because inflation is low, not because growth is low.
  - thaumasiotes 11y ago
    > The dollar was trading at about 0.75 to the Euro around 2009. What is a challenge in your eyes? I can't say what adventured meant by a challenge, but it certainly wasn't that. The exchange rate with the dollar is just a function of how many euros exist. Challenging the dollar would be something more along the lines of "do people prefer to store their wealth in dollars or in euros". See also: http://www.straightdope.com/columns/read/2120/why-is-the-latvian-lat-worth-more-than-the-u-s-dollar http://www.straightdope.com/columns/read/2120/why-is-the-lat... > Man, where to start? Just because a country's basic unit of currency is worth more than ours doesn't mean the country is richer. If you think that 100 pennies is "richer" than 10 dollars because the absolute number is bigger, then we're not going to have much luck dealing with foreign exchange rates. > A common myth is that if a currency is worth less than $1, it's weaker than the U.S. dollar, and if it's worth more, then it's stronger. Your Latvian friend is trying to pull this on you, but it's nonsense.

> The dollar is stronger today than it has been in 20 > years As far as I remember the US Dollar was about 1.25 the value of the Euro at it's peak in 1999/2000. We traded in dollars at the time.

adventured 11y ago

The Yen was a credible currency in 1995, and it's now in much worse shape (both today and its outlook). The Euro was widely expected to pose a challenge to the dollar globally, which has not happened at all. The dollar is as strong as it is even with 0% interest rates. Imagine if rates were even half the levels they were 20 years ago. I'd definitely make the argument the dollar is stronger today than it has been since the late 1990s when the US economy was riding very high. In the next few years, most likely the dollar will gain more strength (the US budget is currently under control, growth is ok, and the employment picture continues to strengthen spurring tax growth), the Euro will be debased with more QE in mostly futile attempts to spur Eurozone growth, and the Yen will lose a lot more value. The Yuan is also likely to face significant devaluation as China struggles to grow in real terms, but it will at least see greater global share. Things are looking great for the dollar at least for the next ten years.

the-dude 11y ago
> The Euro was widely expected to pose a challenge > to the dollar globally, which has not happened at all. The dollar was trading at about 0.75 to the Euro around 2009. What is a challenge in your eyes? Anyway, these are just opinions ( yours and mine ). Mine: no US rate hike in the foreseeable future, QE4.
- adventured 11y ago
  The Euro has acted as a strangling device for everyone in the union not named Germany. For Germany, it has enabled them to ride an artificially cheaper currency with their exports (were they using their own currency, it would be far more expensive). For Italy, Spain, Portugal, Greece etc, the currency held them back by being even more expensive than their own currency would have been; for eg Finland, it has prevented them from making adjustments to become more competitive on numerous cost structures. The end result has been eight years of no net economic growth (and in recent dollar terms it's now far worse than that). The lack of Eurozone growth will spur more QE for years to come. The US is presently done with its QE program, and there's nothing on the horizon that indicates it'll need to return to that in the next several years (large budget deficits would cause that, but so far Congress isn't growing spending in an out of control manner). That context will push the Euro lower, and the USD higher versus. Until the Eurozone can show off serious growth (not 0.3%-0.5% type 'growth'), rapidly improving household balance sheets, and a significantly improving employment picture (not 11%), the Euro will struggle.
  - the-dude 11y ago
    You are absolutely right!
  - tormeh 11y ago
    You're mostly right, unpleasant as that is in this case. One thing's wrong though: The ECB doesn't really have to care, and historically haven't cared, about growth and unemployment. The ECB is printing money because inflation is low, not because growth is low.
- thaumasiotes 11y ago
  > The dollar was trading at about 0.75 to the Euro around 2009. What is a challenge in your eyes? I can't say what adventured meant by a challenge, but it certainly wasn't that. The exchange rate with the dollar is just a function of how many euros exist. Challenging the dollar would be something more along the lines of "do people prefer to store their wealth in dollars or in euros". See also: http://www.straightdope.com/columns/read/2120/why-is-the-latvian-lat-worth-more-than-the-u-s-dollar http://www.straightdope.com/columns/read/2120/why-is-the-lat... > Man, where to start? Just because a country's basic unit of currency is worth more than ours doesn't mean the country is richer. If you think that 100 pennies is "richer" than 10 dollars because the absolute number is bigger, then we're not going to have much luck dealing with foreign exchange rates. > A common myth is that if a currency is worth less than $1, it's weaker than the U.S. dollar, and if it's worth more, then it's stronger. Your Latvian friend is trying to pull this on you, but it's nonsense.