74 ms·

The euro has tumbled near parity to the US dollar

382 points by systemvoltage 4y ago

systemvoltage 4y ago
I think this happened today at somepoint: https://twitter.com/alexsalvinews/status/1546518198148808708 https://twitter.com/alexsalvinews/status/1546518198148808708 But, I decided to link to the bloomberg article since it gives a better context. To my non-expert intuition, it seems a double-edge. Currency devaluation brings the cost of European manufactured G&S cheaper and brings a boost to the economy, and hurts US exports. On the other hand, Bloomberg cites devaluation of Euro would bring more investments in the US as it is now a parity.
- stncls 4y ago
  Re: title ("lowest since 1999"): It's actually since December 2002. 1999 is the first time the EUR reached parity with (then dipped below) the USD. https://www.google.com/search?q=1+eur+in+usd https://www.google.com/search?q=1+eur+in+usd
  - systemvoltage 4y ago
    Nice catch, corrected the title.
  - omnibrain 4y ago
    I'm pretty sure it was in January 2000. A few days before the 20th. Because the 20th was my grandfathers birthday and I visited him that day, but bought a Wallstreet Journal (Or Financial Times International Edition) with the headline that the euro plunged below parity for the first time at an airport either in Orlando or at the layover in Washington. I may still have this issue in my memorandum box. But no, I won't go looking for it. ;)
- dwater 4y ago
  As a non-economist, that's one of the basic things about trade that was surprisingly hard to wrap my head around. Your currency is high, that's good because you now have much greater buying power outside your country! Everyone else's stuff is cheap! Also, it's bad, because it means your stuff is more expensive, so nobody outside wants to buy it, so your exports decline. Basically it's just: high currency is good if you're importing, bad if you're exporting.
  - TheOtherHobbes 4y ago
    Keep in mind forex prices are all gambling anyway. These prices are the opinion of a relatively small number of people, some of whom - like certain well known banks - have a long record of bad faith price fixing. For example: https://en.wikipedia.org/wiki/Libor_scandal https://en.wikipedia.org/wiki/Libor_scandal
    - blibble 4y ago
      > These prices are the opinion of a relatively small number of people complete rubbish, FX is the most liquid and actively traded instruments there are
      - neilpanchal 4y ago
        Yes. > In terms of trading volume, it is by far the largest market in the world, followed by the credit market. Furthermore: > Trades between foreign exchange dealers can be very large, involving hundreds of millions of dollars. Because of the sovereignty issue when involving two currencies, Forex has little (if any) supervisory entity regulating its actions. https://en.wikipedia.org/wiki/Foreign_exchange_market https://en.wikipedia.org/wiki/Foreign_exchange_market
    - wyager 4y ago
      Total nonsense. Forex markets are extremely liquid; narrow and deep. Right now, I could exchange 3M USD for euros (or vice versa) and not even move the price by $0.0001.
  - 4y ago
- christkv 4y ago
  I would think it would mean more investment in the euro zone as you get a big discount on any investments paid in dollars compared to a year ago.
  - littlestymaar 4y ago
    The article is actually talking about public debt, which is different from “investment” in the FDI sense, but is still “investment” from the investor's PoV. I have a colleague who likes to say that “every concept expressed with less than three words is adding confusion instead of reducing it”, and I like this saying more and more every day.
- littlestymaar 4y ago
  What you're describing is the “long term” possible outcome, but in the meantime, plummeting Euro is a major reason for high inflation in the EU. This is the most concerning “second edge”.
- paganel 4y ago
  Devaluation of the euro also increases the real price we have to pay for oil and gas.
- Proven 4y ago
mise_en_place 4y ago
$DXY is 107, market is incorrectly predicting this is like 2008 which was a deflationary recession. This is going to be an inflationary depression.
- hcmacro 4y ago
  $DXY has been rising since Jan 2021, not yesterday.
- chrisco255 4y ago
  It's at 108.2 right now.
- DoingIsLearning 4y ago
  How does one protect oneself in an inflationary depression? Hold no cash other than emergency fund?
TekMol 4y ago
[flagged]
- iasay 4y ago
  You’re right. Europe sold out a chunk of its high profile technology industry and never bothered to invest afterwards. Philips was the worst. They bought up every single electronic component supplier then sold it all to China. And let’s not look at the whole Nokia and Microsoft shit show. The electronic design industry shrank so quickly that it actually pushed people out into other sectors. We’re just pouring fuel on the race to the bottom. Lots of old men got to die rich. Edit: don’t know why parent post was flagged. It was spot on.
- kmonsen 4y ago
  Deepmind is a British company (now owned by Google), and are for sure at the forefront of AI from anything I can understand. Covid vaccines were almost all done by European companies. Europe is different for sure, and incumbents often use regulations to fight innovation but that happens in the US as well. Internet access for example is a lot better in Europe compared to US.
  - TekMol 4y ago
    Britain is not in the EU. If we include Britain, there would be 2 websits in the top 100. A Hungarian porn website and bbc.com
    - MrsPeaches 4y ago
      Europe != EU Britain is in Europe but not the EU.
    - TheDong 4y ago
      > There is only one European website in the top 100 websites spotify.com is swedish, and booking.com is the netherlands. Both of those are part of the EU, are in the top 100, and are not porn websites. There are more I'm sure, but I know those off-hand.
eimrine 4y ago
Weak Euro == less of value being payed to Russia for gas?
- SmallBets 4y ago
  They have to pay in rubles, which are also strong vs euro
  - littlestymaar 4y ago
    Having to pay in rubble is the reason why rubble is strong vs Euro (because you need to buy rubble, in order to pay for gas)
    - lesuorac 4y ago
      What definition of strong are you using? Ruble (only one l) has historically been around 85:1 and now its ~60:1. (Rubles:Euros, i.e. 85 Rubles for 1 Euro) https://www.xe.com/currencycharts/?from=EUR&to=RUB https://www.xe.com/currencycharts/?from=EUR&to=RUB
      - littlestymaar 4y ago
        > Ruble (only one l) Indeed, thanks. Not a native speaker here, and I got everything mixed up with the early-war pun “the Ruble is going to rubble” > What definition of strong are you using? Ruble […] has historically been around 85:1 and now its ~60:1. (Rubles:Euros, i.e. 85 Rubles for 1 Euro) Yes, that means Ruble's purchasing power increased by 40% (one Ruble could buy you ~1.2 euro cent, and now it buys you ~1.7).
      - s1artibartfast 4y ago
        That means it is about 40% stronger than it historically has been. IF you had your money in Rubles last year, can buy 40% more of a product than if you had your money in Euros.
        4y ago
guerby 4y ago
https://archive.ph/blAqQ https://archive.ph/blAqQ
sfusato 4y ago
This is gonna be a hard winter in Europe, that's for sure. I fear a "free for all" type of scenario where everyone will be scraping to get some gas.
- downrightmike 4y ago
  Or just Ryanair'ing down to Spain
  - paganel 4y ago
    Unfortunately not all of us can afford 3-month Airbnb stays in places like Southern Spain over winter.
    - andix 4y ago
      WHO says your heating bill will be less?
      - Hamuko 4y ago
        You still need to heat your home, are you there or not.
        jefftk 4y ago
        If no one will be there you can drain the pipes and leave it unheated over the winter. People typically do this with summer homes. (I think this thread is silly though: there's no way enough people will move to warm climates for the winter to make a dent in cold-country fuel consumption.)
        secondcoming 4y ago
        At least in the UK, the part of the bill that is really increasing is the Standing Charge (a charge just for being connected to the gas network). So even if you turn off your heating your bills are still going to increase.
V__ 4y ago
Since the US has a trade deficit with the EU [1], will this negatively impact the US or positively impact the EU in any tangible way? [1] https://www.census.gov/foreign-trade/balance/c0003.html https://www.census.gov/foreign-trade/balance/c0003.html
- dkjaudyeqooe 4y ago
  In this situation the US is importing deflation (Euro) and the EU is importing inflation (USD), assuming you pay in the currency of the country you're buying from. And given the deficit there is more of former happening than the later.
- JPLeRouzic 4y ago
  I may be wrong but international trade is often labelled in US Dollars [0], so for US entities buying at EU, it would change little, while for EU entities buying in US, it would be costlier as they would have (or their bank) to buy more Dollars to pay for the imported stuff. For US entities selling to EU, nothing changes, but for EU entities selling to US, they would receive less Euros for a given amount in Dollar. As their cost structure is in Euro, they will have a lower net income. [0] https://en.wikipedia.org/wiki/International_use_of_the_U.S._dollar#In_the_global_markets https://en.wikipedia.org/wiki/International_use_of_the_U.S._...
RcouF1uZ4gsC 4y ago
I actually have long term questions about the viability of the EU as a major global player. It doesn't have the natural resources that the US/Russia/China have. It is interesting that the time was the nations that would be the EU were most dominant, they used colonization to get the resources from all over the world (see for example British Empire). In addition, there is still lack of political unity, with a much less powerful centralized government compared to say China or even the US.
- aaomidi 4y ago
  Keep in mind colonization is alive and well within Europe. Just an example: https://www.cadtm.org/Africa-How-France-Continues-to-Dominate-Its-Former-Colonies-in-Africa https://www.cadtm.org/Africa-How-France-Continues-to-Dominat... France is still operating a colonial governance system, we just kinda ignore it.
- ericmay 4y ago
  Well, it does have resources. Wine from France, for example. Natural gas and oil (Norway for example). But the EU, so long as it avoids political fragmentation will be ok because they can manufacture products and they have skilled workers and knowledge. It's not just about resources.
  - T-A 4y ago
    Nitpick: Norway is not a EU member.
    - Der_Einzige 4y ago
      ... Yet
      - blibble 4y ago
        it never will be with the common fisheries policy
- balderdash 4y ago
rossdavidh 4y ago
Maybe more interesting is that the Euro is also down vs. the British pound and even the Japanese yen. It's true the US dollar is appreciating against almost every other currency, but the euro is down even against the Swiss Franc, presumably also impacted by the war in eastern Europe and its threat to grain and energy imports.
- arcticbull 4y ago
  Yeah, the EU also has a strong trade relationship with China - which was slammed by lockdowns. They've been smacked around from all sides.
  - petre 4y ago
    Hopefully this is going to be a wake up call but probably not. The US economy is much more robust, USD is the reserve currency and it also doesn't help that capital is fleeing to the US.
    - simonh 4y ago
      It's not like that's a particular problem for Europe though. The US imports more from China than from any other country, and about the same as it imports from the entire Euro zone.
      - petre 4y ago
        It's a problem specifically because of dependence on Russian gas, let alone Chinese imports.
        simonh 4y ago
        Every country is dependent on everyone else at this point. We're all in it together. We do need to be smart about it though. We've been particularly dumb about Russia ever since 2014, that's crystal clear now. I think relying on (taking advantage of?) cheap Russian gas is only a mistake if you also think that giving Russia a pass over annexing Crimea was acceptable. In reality choosing to do both was a catastrophic error. You can make deals with your enemies (and both Russia and China as oppressive expansionist autocracies are choosing to be our enemies), as long as you make it clear where your boundaries are. We didn't do that clearly enough with Russia, and cannot afford to make the same mistake with China.
jmyeet 4y ago
This article mentions the interest rates issue but glosses over it. Imagine two currencies ABC and DEF. They are at parity (ie 1 ABC = 1 DEF). ABC's central bank has 10% interest rates. DEF's central bank has 1% interest rates. What happens? ABC strengthens against DEF just based on the interst rate differential. Why? Imagine if it didn't. You could borrow DEF 1B, convert to ABC, earn 10% interest and then pay it back later. If the exchange rate remains fixed, that would be a risk-free return of 9%. Because of that it doesn't happen. Think about it. This creates demand for ABC. Because of skyrocketing inflation, the Fed has raised interest rates. Europe has not [1] and really can't. Secondly, in uncertain times, there is nearly always a flight to the safety in financial markets, which usually means US Treasury bonds. This too creates demand for US dollars. So there are issues with th eEuro but really what you're seeing is a strong US dollar. This is a temporary situation. I'm not saying the energy issues in Europe aren't significant. They are. We can hope this creates pressure for a peaceful resolution to the war in Ukraine. This idea seems to make a lot of people angry like it means capitulating to Russia. Every conflict ends diplomatically (including WW2). Russia too is facing pressure to find a win and end the war as it's not sustainable long term so we're really in a game of chicken. Putin may be hoping a European winter (where the effects of an energy shortage will be more pronounced) will sway the odds in his favor. [1]: https://www.euribor-rates.eu/en/euribor-charts/ https://www.euribor-rates.eu/en/euribor-charts/
- WaxProlix 4y ago
  Can you explain a little bit about what you mean by the "...and really can't" line? Is this just because they lack some of the mechanisms of a true central bank as a shared entity across the eurozone, or something less obvious?
  - Tsarbomb 4y ago
    I was wondering about this too. I'm in Canada and we've been raising our rate even more aggressively than the USA. What is stopping Europe?
    - pkaye 4y ago
rr888 4y ago
This isn't about the Euro. Yen is at a 20 year low as well, and pretty much all other currencies are soft too. Its dollar strength, interest rates in USD are much higher and going up (for now).
- throwawaymanbot 4y ago
taylodl 4y ago
Is it the Euro sinking or the US dollar rising? The U.S. dollar has been gaining a lot of value over the past couple of quarters - enough so to call into question whether inflation is being caused by currency policy, as the Federal Reserve believes, or being caused by actual supply constraints - as I and several other economists believe (but I'm not an economist). The fact the dollar is rising in value and yet prices have still continued to rise tells me the problem is supply. Supply shortages are something Western policy makers haven't had to contend with for quite some tine, certainly not in the lifetime of the policy makers!
- revnode 4y ago
  Europe simply printed more money than the US. Same for everyone else.
  - s1artibartfast 4y ago
    I find that hard to believe. Do you have a reference? My understanding that the US stimulus was generally unparalleled
    - misja111 4y ago
      You're right, US has printed much more money. The EU is catching up though. In 2021, EU total amount of quantitative easing was 2.947 trillion euro's. https://en.wikipedia.org/wiki/European_Central_Bank#Low_inflation_and_quantitative_easing_(2015%E2%80%932019) https://en.wikipedia.org/wiki/European_Central_Bank#Low_infl... US: $4.5 trillion https://en.wikipedia.org/wiki/Quantitative_easing#:~:text=The%20Federal%20Reserve%20began%20conducting,to%20the%20COVID%2D19%20pandemic https://en.wikipedia.org/wiki/Quantitative_easing#:~:text=Th....
      - mardifoufs 4y ago
        That's just for 2021 though.
        4y ago
andreyk 4y ago
I am curious if this is correct: The EU has a population roughly of similar size to that of the US, and the EU had (when it included the UK) an economy roughly the size of the US in terms of GDP (https://www.thebalance.com/world-s-largest-economy-3306044 https://www.thebalance.com/world-s-largest-economy-3306044). Is that right? (I just looked this up via Google) Also, Discussion of Europe's lack of mega companies / weakness is often a theme here, and there are many fair points to be made about its lack of entrepreneur culture and unfriendliness to business. But I'd like to point out that it's worth to think about more than just economies in comparing the EU to the rest of the world. So let me mention a couple of other things worth noting: Stuff like GDPR or the currently-in-the-works AI act (not to mention all the other rights and wellfare benefits common in much of the EU) don't help the EU's economy but do benefit its citizens in many ways (as far as I am aware). A bunch of countries in the EU (looks like about 12) has a happiness index score higher or the same as the US (https://www.theglobaleconomy.com/rankings/happiness/Europe/ https://www.theglobaleconomy.com/rankings/happiness/Europe/). Many of its countries also have higher life expectancy (https://www.worldometers.info/demographics/life-expectancy/ https://www.worldometers.info/demographics/life-expectancy/).
- hef19898 4y ago
  Regarding those "mega-corps", Europe has quite a few of those as well. Food, aerospace, automotive, machinery, pharma, chemicals...
  - partiallypro 4y ago
    Most of them are German. Automotive is a huge global driver and Germany has 3 of the top 10 companies; it's just a fact.
    - hef19898 4y ago
      Sanofi, Nestle, Airbus, Stellantis are not. And those are just the ones I come up woth from top of my head. Germany's strength are actually mid sozed comoanies ezcellong it what they do. And the big obes, is it really a surprise that the biggest EU economy actually has a fair share mega corps?
hcmacro 4y ago
Rising nationalism worldwide is a bane to European prosperity and I don't see that trend reversing. In the latest bout of EUR depreciation, one can interpret Russia's invasion as a nationalist imperative. The prior bout of EUR volatility accompanied Brexit, of course. And over the last decade, the US has been a better investment destination than Europe (probably the case going forward too). In contrast, many commentators thought London (and Paris to a much lesser extent) would take financial market share away from New York during the aughts, the heyday of globalization. Celebrities like Gisele famously demanded to be paid in EUR, while Jay-Z showed off his Euro notes in the video for "Blue Magic."
- bobthepanda 4y ago
  It doesn’t really help that the last crisis exposed that Eurozone governance is a headache compared to the relative cohesion of a one-country currency, due to the individual countries butting heads about policy.
  - was_a_dev 4y ago
    Is that no different to regional leaders butting heads in government?
    - bitshiftfaced 4y ago
      The difference is that even when non-Euro countries have different regional leaders butting heads, you still have both fiscal and monetary policy controlled by those elected/appointed from the same country.
    - bobthepanda 4y ago
      To look at the government styles of other major reserve currencies (USD, CNY, JPY), state/provincial/regional governors have little to no impact on monetary or financial policy. Florida doesn't have the ability to veto the FDIC saving a New York bank for political points, the same way Germany was very will-they-won't-they over several major bailouts.
- 4y ago
throwawaymanbot 4y ago
anony999 4y ago
Is this bad? Many said the EUR strength was a curse for most of the EU states (i.e. Greece, Italy etc) except Germany.
- dsq 4y ago
  A weaker currency is better for exports. So Italy can export cars, or olive oil, and the foreign currency it receives will buy more euros for paying employees, local suppliers, etc.
  - mixedCase 4y ago
    And it merits stating the obvious: In turn, employees and local suppliers suffer a worse quality of life as their salary loses buying power. Inflation redistributes wealth from people who earn and save in local currency (lower and middle class most impacted) to benefit those who deal more in foreign currency (upper middle class, rich people). Any inflation above the stability rate, produced by monetary policy, is government thievery plain and simple. I say this as an exporter who financially benefits from local currency inflation.
    - dsq 4y ago
      Absolutely, that's why it's a silver lining in a very dark cloud. Ordinary folks (myself included) suffer greatly in inflation. The only real beneficiaries are exporters of locally produced goods or services
  - logicchains 4y ago
    >A weaker currency is better for exports. Only for exports that don't rely on imported components, because such components will get more expensive.
    - dsq 4y ago
      Quite right, imports get more expensive. I guess it's only beneficial if you have most of the supply chain in-country.
dsq 4y ago
The silver lining is that a weaker currency means EU exports are more competitive.
- dellIsBetter 4y ago
  And is a good news for US inflation
- chrisco255 4y ago
  But can the EU even scrape together the raw material inputs to produce enough to make up for the trade deficit? Will they be competitive with Chinese exports? Can they implement this strategy given their labor market constraints?
  - hef19898 4y ago
    The answer to all of that is, hold on, yes.
- partiallypro 4y ago
  Very difficult to make new exports that are cheap when your energy costs are soaring. Energy in Germany is up over 400%.
_ph_ 4y ago
This is not a historic low, but a definitive low. There are several reasons for this. - in time of a crisis, the world seems to ralley around the dollar, as it is backed by the strongest economy and the strongest military. - this crisis has hit Europe hard, as it is not only close to the war, but of course, too dependant on Russian oil and especially gas. - there was a lot of inflation internationally, the US federal bank was the first to raise interest to combat inflation. The EU lags behind and is limited in action due to the fear of destabilizing some of its member countries with too high of a debt. Consequently, there is a lot of good reason for the Euro to be weak at these times. However, if the energy crisis can be solved and the war contained, a weak Euro also is also pushing exports from the EU. So there is a lot of reason for this trend to be stopped, if not reversed, until the other extreme is reached again.
- ceeplusplus 4y ago
  Europe doesn't just have an energy crisis though, if Russia decides to cut off the gas they straight up have insufficient energy to make it through the winter. The decline in the Euro is pricing in the risk of catastrophic shutdowns of industry across Europe. All of it a result of moronic politics around nuclear and a failure to build out fossil fuel capacity while the green energy transition was still in progress.
  - Flatcircle 4y ago
    Not building/using nuclear is almost criminal negligence. People will die from that mistake.
    - nivenkos 4y ago
      We can use coal for electricity, the issue is natural gas itself for industry and domestic heating.
    - throwaway290 4y ago
      People are dying from that mistake. FTFY
    - 4y ago
Shadonototra 4y ago
Nothing to see, just the USD being inflated, to a point where nobody will want to do business with the US in USD anymore, it's not looking good
- deleted 4y ago
  [deleted]
- kcb 4y ago
  You got that backwards. You're getting more euros for your dollar now.
  - Shadonototra 4y ago
    reverse psychology, the effect intended, is the outcome you didn't expect
firstSpeaker 4y ago
What is the impact of this on ordinary citizens? Not the impact of inflation or impact or gas supplies, etc. The impact of this two currencies having parity.
- abeppu 4y ago
  A variant of this is ... if you're in the US, what are you deliberately purchasing from the EU now (and how?). Are there consumer goods you care about where it now makes sense to order from the EU even with a greater shipping cost + time? If you're in the EU, what are US goods you would ordinarily buy but which are now out of reach?
  - landemva 4y ago
    Tourism - using hotels and transport.
- andruby 4y ago
  Apple devices (and other goods prices in usd - such as most oil goods) will be a bit more expensive.
- prennert 4y ago
  Europeans investing in S&P500 don't get hammered as much as US citizens right now..
nikolay 4y ago
- nivenkos 4y ago
  Yeah, economic suicide to make sure US puppets keep getting their gas transit fees.
- lvl102 4y ago
  Really? Perhaps EU should spend some money to defend its own backyard instead of relying on the US for the past 100 years. Just a thought.
  - koonsolo 4y ago
    As a European, I unfortunately have to agree with you.
  - deleted 4y ago
    [deleted]
- _Parfait_ 4y ago
- partiallypro 4y ago
  This is Putin's line. Anyhow, it's not true. The US has been warning Europe (especially Germany) for years that it has become overly reliant on Russian gas and overly dependent on US military aide. Germany even laughed at the US President's face for implying it. Granted it was Trump, but anyone with any semblance of common sense saw this coming, and even someone who is often wrong isn't -always- wrong.
  - nikolay 4y ago
    No, just a direct observation! Biden just told Scholz to stop Nord Stream 2 and he immediately complied with the order! And now EU politicians advise the populace to take shorter showers and wear warm clothes inside.
cronix 4y ago
Meanwhile, the Ruble is up from where it was just before the invasion. There is a sudden drop off during the month following the invasion in late Feb when sanctions were applied, but risen since then. It's currently sitting at a 5 year high. https://www.xe.com/currencycharts/?from=RUB&to=EUR&view=5Y https://www.xe.com/currencycharts/?from=RUB&to=EUR&view=5Y
- AnotherGoodName 4y ago
  Looks like their foreign exchange reserves are dropping though. https://tradingeconomics.com/russia/foreign-exchange-reserves https://tradingeconomics.com/russia/foreign-exchange-reserve... So not sustainable. They are selling foreign currencies to keep the ruble alive.
  - hauget 4y ago
    How does this compare to foreign exchange reserves of other countries like the US & China?
    - gumby 4y ago
      Don't think of the US as having foreign exchange reserves. Other countries have foreign exchange reserves, basically all in US dollar-denominated instruments.
      - colineartheta 4y ago
        This is misleading if not outright wrong [1][2]. The United States absolutely has foreign reserves, and nearly all countries hold foreign reserves that aren’t solely “basically all in US denominated instruments”. Nor can one just wish away the fact that the USD isn’t the only strong currency in the world, nor the only asset foreign countries hold; diversification doesn’t only apply to individuals. 1. https://www.federalreserve.gov/data/intlsumm/current.htm https://www.federalreserve.gov/data/intlsumm/current.htm 2. https://home.treasury.gov/data/us-international-reserve-position https://home.treasury.gov/data/us-international-reserve-posi...
lvl102 4y ago
I wanted to start ordering some goods from EU to take advantage of the favorable FX. Turns out a lot of vendors have stopped shipping to the US (especially for goods that are also available in the US). Some of these goods are nearly double the price in the US.
- negamax 4y ago
  Do you have examples?
benatkin 4y ago
1.00 but not 1.000 It appears to not have crossed exactly 1 yet.
- amelius 4y ago
  Will we see a surge when it does?
  - AnimalMuppet 4y ago
    No (probably). They're just numbers. (I'm not a currency trader, though...)
    - blibble 4y ago
      currency traders tend to be quite superstitious dropping below 1 will drop the "psychological barrier" then they all end up spooking each other into more selling
Zenst 4y ago
Quick look via google shows £1.0 is $1.19 and €1.18 and confirms one dollar is one euro I guess currency traders are having a good day today or did at some stage.
- beojan 4y ago
  A Euro isn't exactly one dollar, it just rounds to 1.00 to 2 decimal places.
gigatexal 4y ago
insane. When we moved to Germany 4+ years ago it was .85 USD to 1 EUR.
- beebmam 4y ago
  I think you mean the opposite
  - SkyMarshal 4y ago
    You're right, it was 1 USD to 1.17647058824 EUR.
    - georgeburdell 4y ago
      I think they meant that the Euro was worth more than 1 USD, as it has for decades
      - deleted 4y ago
        [deleted]
      - gigatexal 4y ago
        Yeah lol I’m dyslexic and got them mixed up. It was .85 eur to 1 usd.
    - aquadoggy 4y ago
      That's odd, because I recall exchanging 3.141592653 USD for 36959913570736074 10^-16 EUR.
beebmam 4y ago
Why is the USD getting stronger? Shouldnt the inflation in the US due to loose monetary policy make the USD weaker internationally?
- decremental 4y ago
  It's not. The Euro is getting weaker at a rate faster than the US dollar.
  - frozencell 4y ago
    Due to US-EU lobbies?
    - frozencell 4y ago
      Why does the EU punishes France’s nuclear electricity?
- mabbo 4y ago
  The Euro is getting weaker, faster. There's a war with Russia. And apparently some monetary policy changes are moving too slowly.
  - RC_ITR 4y ago
    Which is a very strong indicator that current inflation is much more driven by real economy factors than by monetary policy (or at least the situation is more complex than the “money printer go Brrr” crowd wants you to believe).
    - reedjosh 4y ago
      It's really just that “money printer go Brrr” globally. All of the world's central banks are printing like mad. Both the EU and Japan both have negative interest rates atm.
      - 4y ago
muro 4y ago
Not surprising, given the crazy inflation in EU in some countries. I know US also has inflation, but do far it looked (to me) much worse in the EU.
dkjaudyeqooe 4y ago
It's still got 35 pips to go! I'm one for marking the occasion, but let's actually wait until it's there.
callamdelaney 4y ago
- Halan 4y ago
  What’s Brexit anything to do with this, UK had its own currency. Thinking that Brexit has decoupled U.K. from EU’s market destiny is just wishful thinking. Before the Brexit referendum 1£ had been reaching peaks at 1.44€
- kergonath 4y ago
  Sterling is really not doing much better than the Euro against the dollar, and you will feel the effects of inflation just as much as city boys… It’s wishful thinking to believe that the UK will stop being affected by what happens in Europe by throwing a tantrum and going sulking to its metaphorical bedroom.
- dang 4y ago
  Can you please not post in the flamewar style to HN? It's not what this site is for, and it destroys what it is for. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
rsykes2 4y ago
EU interest rates are below 0%. US are around 3%.EU economies are quite slow at the moment compared to US.
yrgulation 4y ago
Likely so that the euro zone can rush exports for cash buildups and then increase the value of the euro so it can buy oil and gas. Meaning it will bounce back up soonish. Else a lot of people will freeze.
- lukeqsee 4y ago
  This is simply not how forex works. The flows of money through FX are astronomical amounts of capital, and even central banks struggle to maintain a hold on a subset of their own currency market, let alone artificially dumping and pumping a currency. The SNB (Swiss National Bank) is probably the most powerful in that regard (able to adjust the currency to their liking), but that is due to having an abnormally strong currency they've used to buy foreign reserves they can utilize to maintain the price targets they want.
superb-owl 4y ago
I've never understood why EUR/USD "parity" is a concept. It seems analogous to two stocks having the same share price - a totally arbitrary number that happens to be equal. Am I wrong?
- Armisael16 4y ago
  No, that’s an accurate way to look at it. The important thing is the relative movement, not the precise value (the US economy would not be meaningfully different if we cut a zero of the end of every price). Psychological effects can come into play, of course.
  - pawsforthought 4y ago
    Notably, the supply of Bitcoin was supposedly calibrated such that dollar-parity would be relatively quickly achieved, and there were indeed headlines made, despite it being a totally arbitrary milestone.
- jonny_eh 4y ago
  You're not wrong but as far as arbitrary comparisons go, them being at parity is a historical anomaly.
  - throwaway1777 4y ago
    This has happened in the past, but the most recent time was 2000-2002
    - Gare 4y ago
      And Euro was introduced in 1999.
- rutierut 4y ago
  Yes, I don't need to pay for my eBay purchases in Tesla stock. This conversion rate has a financial impact on a lot of people. But also you're right.
rsykes2 4y ago
EU interest rates are below 0%. US are above 3%. Also EU economies are a little slower than the US at the moment. Primarily, though, its always rates.
InTheArena 4y ago
I;m getting more and more convinced that the EU/US are far more tied together at this point then anyone thinks. I wonder if we are going to see the EU/US parity act like a peg to the dollar (or conversely, the dollar pegged to the euro) for a while.
sys_64738 4y ago
Is this good or bad? Can anybody who understands money exchange trading tell us what this means?
- gmiller123456 4y ago
  Depends if you have Euros or Dollars. The Euro used to be worth much more than a dollar. Of course, the value of a dollar is also falling, so it just means the Euro is falling faster.
  - afpx 4y ago
    The dollar is falling compared to what? Commodity prices?
    - gmiller123456 4y ago
      There are lots of ways to value the dollar, the Consumer Price Index is probably the most useful.
    - kietay 4y ago
      They mean purchasing power, e.g. inflation.
    - pcmonk 4y ago
      I think the answer is something like: - the dollar is falling compared to US living expenses (US inflation) - the euro is falling compared to the dollar (exchange rate) - therefore, the euro is falling faster compared to US living expenses - but the euro is not necessarily falling faster compared to EU living expenses (EU inflation) Indeed, EU inflation and US inflation seem to be about the same, which means that the exchange rate change is not because one or the other is experiencing more inflation.
  - jessermeyer 4y ago
    Falling relative to what?
- pastor_bob 4y ago
de6u99er 4y ago
This is bad for Europe because our salaries (before tax) have already been lower than US salaries. Additionally we pay much more taxes than you guys on salaries (up to 50%) and on VAT (~20%). Means at the moment until salaries get inflation adjusted that we pay a premium price for everything.
- deleted 4y ago
  [deleted]
- pastor_bob 4y ago
  Canadians do just fine with a weak dollar, low pay, and high taxes
  - peanuty1 4y ago
    Yet 80% of Waterloo computer science grads move to the US after graduating to enjoy a higher quality of life.
    - focom 4y ago
      Yep can confirm. If I had a Canadian passport, I would have no reason to stick to freezing Canada.
  - aabhay 4y ago
    Yup. Canadians don't go bankrupt because of medical bills (the #1 leading cause of bankruptcies in the US)
    - threads2 4y ago
      Yeah but then wE DoN'T hAvE a ChOiCe iN dOcToRs.
    - rmatt2000 4y ago
      > #1 leading cause of bankruptcies in the US This isn't true. A certain well-known politician made this claim, but it turns out she counted everyone who had medical debt when they declared personal bankruptcy as a "bankruptcy caused by medical debt." If someone gambled away their home and incidentally had an unpaid doctor's bill, it's a stretch to call that a medical bankruptcy. https://www.theatlantic.com/business/archive/2009/06/why-elizabeth-warrens-new-bankruptcy-study-is-so-bad/18835/ https://www.theatlantic.com/business/archive/2009/06/why-eli...
chadash 4y ago
Well, it rounds to the same number. But if you really care about an arbitrary line being crossed, then just know that as of 21:31 UTC, the Euro is still slightly higher than the dollar at 1.0039618 and it has not dipped at or below 1.00 yet.
donatj 4y ago
The Yen has bounced around ¥100 to $1 since the early 90's. I've had a completely unfounded theory about it for years that the tighter two economies are linked, the more likely this is to happen. People dealing in both being more willing just to round one way or the other bringing it into some sort of homeostasis due to simpler in-head math.
- aidenn0 4y ago
  Until recently. it's been over ¥130 for a while now; at least some of my digial purchases are denominated in yen, so I've noticed the dollar strengthening.
- jedberg 4y ago
  The CAD/USD pair would be a counterexample to your theory. Our economies are pretty strongly linked, and usually CAD is about .75 USD, but it's gone as low as .60 and as high as 1.05 (although interestingly it almost always heads back down if it hits 1.0).
steviedotboston 4y ago
1 liek = 1 prayer
yieldcrv 4y ago
Euro is my new favorite USD stablecoin
buzzwords 4y ago
This because Euro is falling in value (probably faster than USD is falling in value)
nivenkos 4y ago
- dodgerdan 4y ago
  France, Italy and Germany’s economic comfort is absolutely meaningless in the face of what Russia is doing. You haven’t figured out the fact that peace with Russia is a country being invaded, looted, with thousands murdered, war crimes and abuses? But wait there’s more, a few years later the Russians do it again.
  - IdiocyInAction 4y ago
    A country no EU nations had any defense obligations to.
- happyopossum 4y ago
  Yeah, it would be great if Putin withdrew from the war so countries could consider something like that, but...
- kergonath 4y ago
  I am not sure we are living on the same continent. Europe has not entered the war; the war has entered Europe, on a Russian tank. “Europe” (whoever this is) cannot withdraw from the war. The war will be thee until either Ukraine or Russia bleeds dry. And if it is Ukraine, then it will be only a start of political and economical instability.
  - IdiocyInAction 4y ago
    Germany and the rest of the western EU nations could decide to stop arming Ukraine and stop doing sanctions against Russia.
    - kergonath 4y ago
      Idiocy in action, indeed.
ggregoire 4y ago
I just checked a few mainstream European news sites and none of them are talking about it. (might be cause it's midnight?)
- dkjaudyeqooe 4y ago
  Because it hasn't happened yet. It might not happen. When it actually happens you'll see 0.99 something. The OP jumped the gun.
partiallypro 4y ago
Germany, and by extension Europe, abandoning nuclear power and making itself more dependent on a country historically at odds with the rest of Europe will go down as one of the biggest political/economic blunders of the century. Germany is such a powerful economy in Europe that it being so dependent on Russian gas will effect every country and they will all collectively suffer. It's also pathetic that both the US and EU both now have to go beg other bad actors for oil/gas.
- nivenkos 4y ago
  Whilst I support nuclear power, it's not the main issue, but the lack of progress in electrification of industry and homes. A lot of processes and heating still use natural gas directly, and that is what is causing the threat of industrial shutdowns. Many countries have already switched to coal for electricity generation - https://www.reuters.com/business/energy/netherlands-activates-energy-crisis-plan-removes-cap-coal-plants-2022-06-20/ https://www.reuters.com/business/energy/netherlands-activate...
- option 4y ago
  interesting fact - Ukraine in the middle of war now sells electricity for profit to Europe because they haven’t completely abandoned nuclear. This is even despite the fact of them losing their largest nuclear plant (in Zaporizhja) to russia. Germany’s decision to abandon nuclear is one of the most stupid ones ever.
BryanBeshore 4y ago
Reminds me a bit of the Dollar Milkshake Theory
senectus1 4y ago
Friend of mine says this appears to be the "$1 milkshake effect" https://www.theinvestorspodcast.com/episodes/the-dollar-milkshake-theory-update-w-brent-johnson/ https://www.theinvestorspodcast.com/episodes/the-dollar-milk... The USD FIAT is sucking the liquidity out of the other markets.
KronisLV 4y ago
I manage most of my investments through my bank: basically funds that represent a certain part of the industry, managed by external firms. I have invested in quite a few different ones, everything from the technology sector, to biotech, to emerging industries funds. Compared to about 5 years ago, the total value had increased by about 40% from what it was initially. This year? Everything's back to around 0% - some of those are in the red, some have measly value increases, but overall it's just like stashing money in a sock somewhere, instead of actually investing it. In a sense, it's telling of the greater situation economically - and that's even when you ignore the funds that had some Russian investments as a part of the portfolio (the trading of which was suspended altogether). When you consider the inflation that we're having here (Latvia) and now also the situation with the overall value of Euro, it doesn't look too good, to be honest. But hey, I'm paid comparatively little anyways and people working at US companies probably make in a month what I make in a quarter, so no point in crying over insignificant amounts of money. I'll continue to have some financial stability, just will never have things like nice cars or owning my own housing at this rate.
PeterStuer 4y ago
Well. For us computer geeks the "euro price is the dollar price" has been a thing for decades.
caycep 4y ago
Low euro should make exports more competitive, no? I remember after 2008, greece and other countries, couldn't devalue currency enough to help them get out of the recession as they were all tied to the euro; that extended their pain longer than otherwise would have been expected.
purplepatrick 4y ago
And that’s a good thing. Heavily export-dependent economies such as Germany that have outsized influence on EU’s economic performance need a weak Euro in this time of crisis.

382 points by systemvoltage 4y ago

I think this happened today at somepoint: https://twitter.com/alexsalvinews/status/1546518198148808708 https://twitter.com/alexsalvinews/status/1546518198148808708 But, I decided to link to the bloomberg article since it gives a better context. To my non-expert intuition, it seems a double-edge. Currency devaluation brings the cost of European manufactured G&S cheaper and brings a boost to the economy, and hurts US exports. On the other hand, Bloomberg cites devaluation of Euro would bring more investments in the US as it is now a parity.

stncls 4y ago
Re: title ("lowest since 1999"): It's actually since December 2002. 1999 is the first time the EUR reached parity with (then dipped below) the USD. https://www.google.com/search?q=1+eur+in+usd https://www.google.com/search?q=1+eur+in+usd
- systemvoltage 4y ago
  Nice catch, corrected the title.
- omnibrain 4y ago
  I'm pretty sure it was in January 2000. A few days before the 20th. Because the 20th was my grandfathers birthday and I visited him that day, but bought a Wallstreet Journal (Or Financial Times International Edition) with the headline that the euro plunged below parity for the first time at an airport either in Orlando or at the layover in Washington. I may still have this issue in my memorandum box. But no, I won't go looking for it. ;)
dwater 4y ago
As a non-economist, that's one of the basic things about trade that was surprisingly hard to wrap my head around. Your currency is high, that's good because you now have much greater buying power outside your country! Everyone else's stuff is cheap! Also, it's bad, because it means your stuff is more expensive, so nobody outside wants to buy it, so your exports decline. Basically it's just: high currency is good if you're importing, bad if you're exporting.
- TheOtherHobbes 4y ago
  Keep in mind forex prices are all gambling anyway. These prices are the opinion of a relatively small number of people, some of whom - like certain well known banks - have a long record of bad faith price fixing. For example: https://en.wikipedia.org/wiki/Libor_scandal https://en.wikipedia.org/wiki/Libor_scandal
  - blibble 4y ago
    > These prices are the opinion of a relatively small number of people complete rubbish, FX is the most liquid and actively traded instruments there are
    - neilpanchal 4y ago
      Yes. > In terms of trading volume, it is by far the largest market in the world, followed by the credit market. Furthermore: > Trades between foreign exchange dealers can be very large, involving hundreds of millions of dollars. Because of the sovereignty issue when involving two currencies, Forex has little (if any) supervisory entity regulating its actions. https://en.wikipedia.org/wiki/Foreign_exchange_market https://en.wikipedia.org/wiki/Foreign_exchange_market
  - wyager 4y ago
    Total nonsense. Forex markets are extremely liquid; narrow and deep. Right now, I could exchange 3M USD for euros (or vice versa) and not even move the price by $0.0001.
- 4y ago
christkv 4y ago
I would think it would mean more investment in the euro zone as you get a big discount on any investments paid in dollars compared to a year ago.
- littlestymaar 4y ago
  The article is actually talking about public debt, which is different from “investment” in the FDI sense, but is still “investment” from the investor's PoV. I have a colleague who likes to say that “every concept expressed with less than three words is adding confusion instead of reducing it”, and I like this saying more and more every day.
littlestymaar 4y ago
What you're describing is the “long term” possible outcome, but in the meantime, plummeting Euro is a major reason for high inflation in the EU. This is the most concerning “second edge”.
paganel 4y ago
Devaluation of the euro also increases the real price we have to pay for oil and gas.
Proven 4y ago

mise_en_place 4y ago

$DXY is 107, market is incorrectly predicting this is like 2008 which was a deflationary recession. This is going to be an inflationary depression.

hcmacro 4y ago
$DXY has been rising since Jan 2021, not yesterday.
chrisco255 4y ago
It's at 108.2 right now.
DoingIsLearning 4y ago
How does one protect oneself in an inflationary depression? Hold no cash other than emergency fund?

TekMol 4y ago

[flagged]

iasay 4y ago
You’re right. Europe sold out a chunk of its high profile technology industry and never bothered to invest afterwards. Philips was the worst. They bought up every single electronic component supplier then sold it all to China. And let’s not look at the whole Nokia and Microsoft shit show. The electronic design industry shrank so quickly that it actually pushed people out into other sectors. We’re just pouring fuel on the race to the bottom. Lots of old men got to die rich. Edit: don’t know why parent post was flagged. It was spot on.
kmonsen 4y ago
Deepmind is a British company (now owned by Google), and are for sure at the forefront of AI from anything I can understand. Covid vaccines were almost all done by European companies. Europe is different for sure, and incumbents often use regulations to fight innovation but that happens in the US as well. Internet access for example is a lot better in Europe compared to US.
- TekMol 4y ago
  Britain is not in the EU. If we include Britain, there would be 2 websits in the top 100. A Hungarian porn website and bbc.com
  - MrsPeaches 4y ago
    Europe != EU Britain is in Europe but not the EU.
  - TheDong 4y ago
    > There is only one European website in the top 100 websites spotify.com is swedish, and booking.com is the netherlands. Both of those are part of the EU, are in the top 100, and are not porn websites. There are more I'm sure, but I know those off-hand.

eimrine 4y ago

Weak Euro == less of value being payed to Russia for gas?

SmallBets 4y ago
They have to pay in rubles, which are also strong vs euro
- littlestymaar 4y ago
  Having to pay in rubble is the reason why rubble is strong vs Euro (because you need to buy rubble, in order to pay for gas)
  - lesuorac 4y ago
    What definition of strong are you using? Ruble (only one l) has historically been around 85:1 and now its ~60:1. (Rubles:Euros, i.e. 85 Rubles for 1 Euro) https://www.xe.com/currencycharts/?from=EUR&to=RUB https://www.xe.com/currencycharts/?from=EUR&to=RUB
    - littlestymaar 4y ago
      > Ruble (only one l) Indeed, thanks. Not a native speaker here, and I got everything mixed up with the early-war pun “the Ruble is going to rubble” > What definition of strong are you using? Ruble […] has historically been around 85:1 and now its ~60:1. (Rubles:Euros, i.e. 85 Rubles for 1 Euro) Yes, that means Ruble's purchasing power increased by 40% (one Ruble could buy you ~1.2 euro cent, and now it buys you ~1.7).
    - s1artibartfast 4y ago
      That means it is about 40% stronger than it historically has been. IF you had your money in Rubles last year, can buy 40% more of a product than if you had your money in Euros.
      - 4y ago

guerby 4y ago

https://archive.ph/blAqQ https://archive.ph/blAqQ

sfusato 4y ago

This is gonna be a hard winter in Europe, that's for sure. I fear a "free for all" type of scenario where everyone will be scraping to get some gas.

downrightmike 4y ago
Or just Ryanair'ing down to Spain
- paganel 4y ago
  Unfortunately not all of us can afford 3-month Airbnb stays in places like Southern Spain over winter.
  - andix 4y ago
    WHO says your heating bill will be less?
    - Hamuko 4y ago
      You still need to heat your home, are you there or not.
      - jefftk 4y ago
        If no one will be there you can drain the pipes and leave it unheated over the winter. People typically do this with summer homes. (I think this thread is silly though: there's no way enough people will move to warm climates for the winter to make a dent in cold-country fuel consumption.)
        secondcoming 4y ago
        At least in the UK, the part of the bill that is really increasing is the Standing Charge (a charge just for being connected to the gas network). So even if you turn off your heating your bills are still going to increase.

V__ 4y ago

Since the US has a trade deficit with the EU [1], will this negatively impact the US or positively impact the EU in any tangible way? [1] https://www.census.gov/foreign-trade/balance/c0003.html https://www.census.gov/foreign-trade/balance/c0003.html

dkjaudyeqooe 4y ago
In this situation the US is importing deflation (Euro) and the EU is importing inflation (USD), assuming you pay in the currency of the country you're buying from. And given the deficit there is more of former happening than the later.
JPLeRouzic 4y ago
I may be wrong but international trade is often labelled in US Dollars [0], so for US entities buying at EU, it would change little, while for EU entities buying in US, it would be costlier as they would have (or their bank) to buy more Dollars to pay for the imported stuff. For US entities selling to EU, nothing changes, but for EU entities selling to US, they would receive less Euros for a given amount in Dollar. As their cost structure is in Euro, they will have a lower net income. [0] https://en.wikipedia.org/wiki/International_use_of_the_U.S._dollar#In_the_global_markets https://en.wikipedia.org/wiki/International_use_of_the_U.S._...

RcouF1uZ4gsC 4y ago

I actually have long term questions about the viability of the EU as a major global player. It doesn't have the natural resources that the US/Russia/China have. It is interesting that the time was the nations that would be the EU were most dominant, they used colonization to get the resources from all over the world (see for example British Empire). In addition, there is still lack of political unity, with a much less powerful centralized government compared to say China or even the US.

aaomidi 4y ago
Keep in mind colonization is alive and well within Europe. Just an example: https://www.cadtm.org/Africa-How-France-Continues-to-Dominate-Its-Former-Colonies-in-Africa https://www.cadtm.org/Africa-How-France-Continues-to-Dominat... France is still operating a colonial governance system, we just kinda ignore it.
ericmay 4y ago
Well, it does have resources. Wine from France, for example. Natural gas and oil (Norway for example). But the EU, so long as it avoids political fragmentation will be ok because they can manufacture products and they have skilled workers and knowledge. It's not just about resources.
- T-A 4y ago
  Nitpick: Norway is not a EU member.
  - Der_Einzige 4y ago
    ... Yet
    - blibble 4y ago
      it never will be with the common fisheries policy
balderdash 4y ago

rossdavidh 4y ago

Maybe more interesting is that the Euro is also down vs. the British pound and even the Japanese yen. It's true the US dollar is appreciating against almost every other currency, but the euro is down even against the Swiss Franc, presumably also impacted by the war in eastern Europe and its threat to grain and energy imports.

arcticbull 4y ago
Yeah, the EU also has a strong trade relationship with China - which was slammed by lockdowns. They've been smacked around from all sides.
- petre 4y ago
  Hopefully this is going to be a wake up call but probably not. The US economy is much more robust, USD is the reserve currency and it also doesn't help that capital is fleeing to the US.
  - simonh 4y ago
    It's not like that's a particular problem for Europe though. The US imports more from China than from any other country, and about the same as it imports from the entire Euro zone.
    - petre 4y ago
      It's a problem specifically because of dependence on Russian gas, let alone Chinese imports.
      - simonh 4y ago
        Every country is dependent on everyone else at this point. We're all in it together. We do need to be smart about it though. We've been particularly dumb about Russia ever since 2014, that's crystal clear now. I think relying on (taking advantage of?) cheap Russian gas is only a mistake if you also think that giving Russia a pass over annexing Crimea was acceptable. In reality choosing to do both was a catastrophic error. You can make deals with your enemies (and both Russia and China as oppressive expansionist autocracies are choosing to be our enemies), as long as you make it clear where your boundaries are. We didn't do that clearly enough with Russia, and cannot afford to make the same mistake with China.

jmyeet 4y ago

This article mentions the interest rates issue but glosses over it. Imagine two currencies ABC and DEF. They are at parity (ie 1 ABC = 1 DEF). ABC's central bank has 10% interest rates. DEF's central bank has 1% interest rates. What happens? ABC strengthens against DEF just based on the interst rate differential. Why? Imagine if it didn't. You could borrow DEF 1B, convert to ABC, earn 10% interest and then pay it back later. If the exchange rate remains fixed, that would be a risk-free return of 9%. Because of that it doesn't happen. Think about it. This creates demand for ABC. Because of skyrocketing inflation, the Fed has raised interest rates. Europe has not [1] and really can't. Secondly, in uncertain times, there is nearly always a flight to the safety in financial markets, which usually means US Treasury bonds. This too creates demand for US dollars. So there are issues with th eEuro but really what you're seeing is a strong US dollar. This is a temporary situation. I'm not saying the energy issues in Europe aren't significant. They are. We can hope this creates pressure for a peaceful resolution to the war in Ukraine. This idea seems to make a lot of people angry like it means capitulating to Russia. Every conflict ends diplomatically (including WW2). Russia too is facing pressure to find a win and end the war as it's not sustainable long term so we're really in a game of chicken. Putin may be hoping a European winter (where the effects of an energy shortage will be more pronounced) will sway the odds in his favor. [1]: https://www.euribor-rates.eu/en/euribor-charts/ https://www.euribor-rates.eu/en/euribor-charts/

WaxProlix 4y ago
Can you explain a little bit about what you mean by the "...and really can't" line? Is this just because they lack some of the mechanisms of a true central bank as a shared entity across the eurozone, or something less obvious?
- Tsarbomb 4y ago
  I was wondering about this too. I'm in Canada and we've been raising our rate even more aggressively than the USA. What is stopping Europe?
  - pkaye 4y ago

rr888 4y ago

This isn't about the Euro. Yen is at a 20 year low as well, and pretty much all other currencies are soft too. Its dollar strength, interest rates in USD are much higher and going up (for now).

throwawaymanbot 4y ago

taylodl 4y ago

Is it the Euro sinking or the US dollar rising? The U.S. dollar has been gaining a lot of value over the past couple of quarters - enough so to call into question whether inflation is being caused by currency policy, as the Federal Reserve believes, or being caused by actual supply constraints - as I and several other economists believe (but I'm not an economist). The fact the dollar is rising in value and yet prices have still continued to rise tells me the problem is supply. Supply shortages are something Western policy makers haven't had to contend with for quite some tine, certainly not in the lifetime of the policy makers!

revnode 4y ago
Europe simply printed more money than the US. Same for everyone else.
- s1artibartfast 4y ago
  I find that hard to believe. Do you have a reference? My understanding that the US stimulus was generally unparalleled
  - misja111 4y ago
    You're right, US has printed much more money. The EU is catching up though. In 2021, EU total amount of quantitative easing was 2.947 trillion euro's. https://en.wikipedia.org/wiki/European_Central_Bank#Low_inflation_and_quantitative_easing_(2015%E2%80%932019) https://en.wikipedia.org/wiki/European_Central_Bank#Low_infl... US: $4.5 trillion https://en.wikipedia.org/wiki/Quantitative_easing#:~:text=The%20Federal%20Reserve%20began%20conducting,to%20the%20COVID%2D19%20pandemic https://en.wikipedia.org/wiki/Quantitative_easing#:~:text=Th....
    - mardifoufs 4y ago
      That's just for 2021 though.
      - 4y ago

andreyk 4y ago

I am curious if this is correct: The EU has a population roughly of similar size to that of the US, and the EU had (when it included the UK) an economy roughly the size of the US in terms of GDP (https://www.thebalance.com/world-s-largest-economy-3306044 https://www.thebalance.com/world-s-largest-economy-3306044). Is that right? (I just looked this up via Google) Also, Discussion of Europe's lack of mega companies / weakness is often a theme here, and there are many fair points to be made about its lack of entrepreneur culture and unfriendliness to business. But I'd like to point out that it's worth to think about more than just economies in comparing the EU to the rest of the world. So let me mention a couple of other things worth noting: Stuff like GDPR or the currently-in-the-works AI act (not to mention all the other rights and wellfare benefits common in much of the EU) don't help the EU's economy but do benefit its citizens in many ways (as far as I am aware). A bunch of countries in the EU (looks like about 12) has a happiness index score higher or the same as the US (https://www.theglobaleconomy.com/rankings/happiness/Europe/ https://www.theglobaleconomy.com/rankings/happiness/Europe/). Many of its countries also have higher life expectancy (https://www.worldometers.info/demographics/life-expectancy/ https://www.worldometers.info/demographics/life-expectancy/).

hef19898 4y ago
Regarding those "mega-corps", Europe has quite a few of those as well. Food, aerospace, automotive, machinery, pharma, chemicals...
- partiallypro 4y ago
  Most of them are German. Automotive is a huge global driver and Germany has 3 of the top 10 companies; it's just a fact.
  - hef19898 4y ago
    Sanofi, Nestle, Airbus, Stellantis are not. And those are just the ones I come up woth from top of my head. Germany's strength are actually mid sozed comoanies ezcellong it what they do. And the big obes, is it really a surprise that the biggest EU economy actually has a fair share mega corps?

hcmacro 4y ago

Rising nationalism worldwide is a bane to European prosperity and I don't see that trend reversing. In the latest bout of EUR depreciation, one can interpret Russia's invasion as a nationalist imperative. The prior bout of EUR volatility accompanied Brexit, of course. And over the last decade, the US has been a better investment destination than Europe (probably the case going forward too). In contrast, many commentators thought London (and Paris to a much lesser extent) would take financial market share away from New York during the aughts, the heyday of globalization. Celebrities like Gisele famously demanded to be paid in EUR, while Jay-Z showed off his Euro notes in the video for "Blue Magic."

bobthepanda 4y ago
It doesn’t really help that the last crisis exposed that Eurozone governance is a headache compared to the relative cohesion of a one-country currency, due to the individual countries butting heads about policy.
- was_a_dev 4y ago
  Is that no different to regional leaders butting heads in government?
  - bitshiftfaced 4y ago
    The difference is that even when non-Euro countries have different regional leaders butting heads, you still have both fiscal and monetary policy controlled by those elected/appointed from the same country.
  - bobthepanda 4y ago
    To look at the government styles of other major reserve currencies (USD, CNY, JPY), state/provincial/regional governors have little to no impact on monetary or financial policy. Florida doesn't have the ability to veto the FDIC saving a New York bank for political points, the same way Germany was very will-they-won't-they over several major bailouts.
4y ago

throwawaymanbot 4y ago

anony999 4y ago

Is this bad? Many said the EUR strength was a curse for most of the EU states (i.e. Greece, Italy etc) except Germany.

dsq 4y ago
A weaker currency is better for exports. So Italy can export cars, or olive oil, and the foreign currency it receives will buy more euros for paying employees, local suppliers, etc.
- mixedCase 4y ago
  And it merits stating the obvious: In turn, employees and local suppliers suffer a worse quality of life as their salary loses buying power. Inflation redistributes wealth from people who earn and save in local currency (lower and middle class most impacted) to benefit those who deal more in foreign currency (upper middle class, rich people). Any inflation above the stability rate, produced by monetary policy, is government thievery plain and simple. I say this as an exporter who financially benefits from local currency inflation.
  - dsq 4y ago
    Absolutely, that's why it's a silver lining in a very dark cloud. Ordinary folks (myself included) suffer greatly in inflation. The only real beneficiaries are exporters of locally produced goods or services
- logicchains 4y ago
  >A weaker currency is better for exports. Only for exports that don't rely on imported components, because such components will get more expensive.
  - dsq 4y ago
    Quite right, imports get more expensive. I guess it's only beneficial if you have most of the supply chain in-country.

dsq 4y ago

The silver lining is that a weaker currency means EU exports are more competitive.

dellIsBetter 4y ago
And is a good news for US inflation
chrisco255 4y ago
But can the EU even scrape together the raw material inputs to produce enough to make up for the trade deficit? Will they be competitive with Chinese exports? Can they implement this strategy given their labor market constraints?
- hef19898 4y ago
  The answer to all of that is, hold on, yes.
partiallypro 4y ago
Very difficult to make new exports that are cheap when your energy costs are soaring. Energy in Germany is up over 400%.

_ph_ 4y ago

This is not a historic low, but a definitive low. There are several reasons for this. - in time of a crisis, the world seems to ralley around the dollar, as it is backed by the strongest economy and the strongest military. - this crisis has hit Europe hard, as it is not only close to the war, but of course, too dependant on Russian oil and especially gas. - there was a lot of inflation internationally, the US federal bank was the first to raise interest to combat inflation. The EU lags behind and is limited in action due to the fear of destabilizing some of its member countries with too high of a debt. Consequently, there is a lot of good reason for the Euro to be weak at these times. However, if the energy crisis can be solved and the war contained, a weak Euro also is also pushing exports from the EU. So there is a lot of reason for this trend to be stopped, if not reversed, until the other extreme is reached again.

ceeplusplus 4y ago
Europe doesn't just have an energy crisis though, if Russia decides to cut off the gas they straight up have insufficient energy to make it through the winter. The decline in the Euro is pricing in the risk of catastrophic shutdowns of industry across Europe. All of it a result of moronic politics around nuclear and a failure to build out fossil fuel capacity while the green energy transition was still in progress.
- Flatcircle 4y ago
  Not building/using nuclear is almost criminal negligence. People will die from that mistake.
  - nivenkos 4y ago
    We can use coal for electricity, the issue is natural gas itself for industry and domestic heating.
  - throwaway290 4y ago
    People are dying from that mistake. FTFY
  - 4y ago

Shadonototra 4y ago

Nothing to see, just the USD being inflated, to a point where nobody will want to do business with the US in USD anymore, it's not looking good

deleted 4y ago
[deleted]
kcb 4y ago
You got that backwards. You're getting more euros for your dollar now.
- Shadonototra 4y ago
  reverse psychology, the effect intended, is the outcome you didn't expect

firstSpeaker 4y ago

What is the impact of this on ordinary citizens? Not the impact of inflation or impact or gas supplies, etc. The impact of this two currencies having parity.

abeppu 4y ago
A variant of this is ... if you're in the US, what are you deliberately purchasing from the EU now (and how?). Are there consumer goods you care about where it now makes sense to order from the EU even with a greater shipping cost + time? If you're in the EU, what are US goods you would ordinarily buy but which are now out of reach?
- landemva 4y ago
  Tourism - using hotels and transport.
andruby 4y ago
Apple devices (and other goods prices in usd - such as most oil goods) will be a bit more expensive.
prennert 4y ago
Europeans investing in S&P500 don't get hammered as much as US citizens right now..

nikolay 4y ago

nivenkos 4y ago
Yeah, economic suicide to make sure US puppets keep getting their gas transit fees.
lvl102 4y ago
Really? Perhaps EU should spend some money to defend its own backyard instead of relying on the US for the past 100 years. Just a thought.
- koonsolo 4y ago
  As a European, I unfortunately have to agree with you.
- deleted 4y ago
  [deleted]
_Parfait_ 4y ago
partiallypro 4y ago
This is Putin's line. Anyhow, it's not true. The US has been warning Europe (especially Germany) for years that it has become overly reliant on Russian gas and overly dependent on US military aide. Germany even laughed at the US President's face for implying it. Granted it was Trump, but anyone with any semblance of common sense saw this coming, and even someone who is often wrong isn't -always- wrong.
- nikolay 4y ago
  No, just a direct observation! Biden just told Scholz to stop Nord Stream 2 and he immediately complied with the order! And now EU politicians advise the populace to take shorter showers and wear warm clothes inside.

cronix 4y ago

Meanwhile, the Ruble is up from where it was just before the invasion. There is a sudden drop off during the month following the invasion in late Feb when sanctions were applied, but risen since then. It's currently sitting at a 5 year high. https://www.xe.com/currencycharts/?from=RUB&to=EUR&view=5Y https://www.xe.com/currencycharts/?from=RUB&to=EUR&view=5Y

AnotherGoodName 4y ago
Looks like their foreign exchange reserves are dropping though. https://tradingeconomics.com/russia/foreign-exchange-reserves https://tradingeconomics.com/russia/foreign-exchange-reserve... So not sustainable. They are selling foreign currencies to keep the ruble alive.
- hauget 4y ago
  How does this compare to foreign exchange reserves of other countries like the US & China?
  - gumby 4y ago
    Don't think of the US as having foreign exchange reserves. Other countries have foreign exchange reserves, basically all in US dollar-denominated instruments.
    - colineartheta 4y ago
      This is misleading if not outright wrong [1][2]. The United States absolutely has foreign reserves, and nearly all countries hold foreign reserves that aren’t solely “basically all in US denominated instruments”. Nor can one just wish away the fact that the USD isn’t the only strong currency in the world, nor the only asset foreign countries hold; diversification doesn’t only apply to individuals. 1. https://www.federalreserve.gov/data/intlsumm/current.htm https://www.federalreserve.gov/data/intlsumm/current.htm 2. https://home.treasury.gov/data/us-international-reserve-position https://home.treasury.gov/data/us-international-reserve-posi...

lvl102 4y ago

I wanted to start ordering some goods from EU to take advantage of the favorable FX. Turns out a lot of vendors have stopped shipping to the US (especially for goods that are also available in the US). Some of these goods are nearly double the price in the US.

negamax 4y ago
Do you have examples?

benatkin 4y ago

1.00 but not 1.000 It appears to not have crossed exactly 1 yet.

amelius 4y ago
Will we see a surge when it does?
- AnimalMuppet 4y ago
  No (probably). They're just numbers. (I'm not a currency trader, though...)
  - blibble 4y ago
    currency traders tend to be quite superstitious dropping below 1 will drop the "psychological barrier" then they all end up spooking each other into more selling

Zenst 4y ago

Quick look via google shows £1.0 is $1.19 and €1.18 and confirms one dollar is one euro I guess currency traders are having a good day today or did at some stage.

beojan 4y ago
A Euro isn't exactly one dollar, it just rounds to 1.00 to 2 decimal places.

gigatexal 4y ago

insane. When we moved to Germany 4+ years ago it was .85 USD to 1 EUR.

beebmam 4y ago
I think you mean the opposite
- SkyMarshal 4y ago
  You're right, it was 1 USD to 1.17647058824 EUR.
  - georgeburdell 4y ago
    I think they meant that the Euro was worth more than 1 USD, as it has for decades
    - deleted 4y ago
      [deleted]
    - gigatexal 4y ago
      Yeah lol I’m dyslexic and got them mixed up. It was .85 eur to 1 usd.
  - aquadoggy 4y ago
    That's odd, because I recall exchanging 3.141592653 USD for 36959913570736074 10^-16 EUR.

beebmam 4y ago

Why is the USD getting stronger? Shouldnt the inflation in the US due to loose monetary policy make the USD weaker internationally?

decremental 4y ago
It's not. The Euro is getting weaker at a rate faster than the US dollar.
- frozencell 4y ago
  Due to US-EU lobbies?
  - frozencell 4y ago
    Why does the EU punishes France’s nuclear electricity?
mabbo 4y ago
The Euro is getting weaker, faster. There's a war with Russia. And apparently some monetary policy changes are moving too slowly.
- RC_ITR 4y ago
  Which is a very strong indicator that current inflation is much more driven by real economy factors than by monetary policy (or at least the situation is more complex than the “money printer go Brrr” crowd wants you to believe).
  - reedjosh 4y ago
    It's really just that “money printer go Brrr” globally. All of the world's central banks are printing like mad. Both the EU and Japan both have negative interest rates atm.
    - 4y ago

muro 4y ago

Not surprising, given the crazy inflation in EU in some countries. I know US also has inflation, but do far it looked (to me) much worse in the EU.

dkjaudyeqooe 4y ago

It's still got 35 pips to go! I'm one for marking the occasion, but let's actually wait until it's there.

callamdelaney 4y ago

Halan 4y ago
What’s Brexit anything to do with this, UK had its own currency. Thinking that Brexit has decoupled U.K. from EU’s market destiny is just wishful thinking. Before the Brexit referendum 1£ had been reaching peaks at 1.44€
kergonath 4y ago
Sterling is really not doing much better than the Euro against the dollar, and you will feel the effects of inflation just as much as city boys… It’s wishful thinking to believe that the UK will stop being affected by what happens in Europe by throwing a tantrum and going sulking to its metaphorical bedroom.
dang 4y ago
Can you please not post in the flamewar style to HN? It's not what this site is for, and it destroys what it is for. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

rsykes2 4y ago

EU interest rates are below 0%. US are around 3%.EU economies are quite slow at the moment compared to US.

yrgulation 4y ago

Likely so that the euro zone can rush exports for cash buildups and then increase the value of the euro so it can buy oil and gas. Meaning it will bounce back up soonish. Else a lot of people will freeze.

lukeqsee 4y ago
This is simply not how forex works. The flows of money through FX are astronomical amounts of capital, and even central banks struggle to maintain a hold on a subset of their own currency market, let alone artificially dumping and pumping a currency. The SNB (Swiss National Bank) is probably the most powerful in that regard (able to adjust the currency to their liking), but that is due to having an abnormally strong currency they've used to buy foreign reserves they can utilize to maintain the price targets they want.

superb-owl 4y ago

I've never understood why EUR/USD "parity" is a concept. It seems analogous to two stocks having the same share price - a totally arbitrary number that happens to be equal. Am I wrong?

Armisael16 4y ago
No, that’s an accurate way to look at it. The important thing is the relative movement, not the precise value (the US economy would not be meaningfully different if we cut a zero of the end of every price). Psychological effects can come into play, of course.
- pawsforthought 4y ago
  Notably, the supply of Bitcoin was supposedly calibrated such that dollar-parity would be relatively quickly achieved, and there were indeed headlines made, despite it being a totally arbitrary milestone.
jonny_eh 4y ago
You're not wrong but as far as arbitrary comparisons go, them being at parity is a historical anomaly.
- throwaway1777 4y ago
  This has happened in the past, but the most recent time was 2000-2002
  - Gare 4y ago
    And Euro was introduced in 1999.
rutierut 4y ago
Yes, I don't need to pay for my eBay purchases in Tesla stock. This conversion rate has a financial impact on a lot of people. But also you're right.

rsykes2 4y ago

EU interest rates are below 0%. US are above 3%. Also EU economies are a little slower than the US at the moment. Primarily, though, its always rates.

InTheArena 4y ago

I;m getting more and more convinced that the EU/US are far more tied together at this point then anyone thinks. I wonder if we are going to see the EU/US parity act like a peg to the dollar (or conversely, the dollar pegged to the euro) for a while.

sys_64738 4y ago

Is this good or bad? Can anybody who understands money exchange trading tell us what this means?

gmiller123456 4y ago
Depends if you have Euros or Dollars. The Euro used to be worth much more than a dollar. Of course, the value of a dollar is also falling, so it just means the Euro is falling faster.
- afpx 4y ago
  The dollar is falling compared to what? Commodity prices?
  - gmiller123456 4y ago
    There are lots of ways to value the dollar, the Consumer Price Index is probably the most useful.
  - kietay 4y ago
    They mean purchasing power, e.g. inflation.
  - pcmonk 4y ago
    I think the answer is something like: - the dollar is falling compared to US living expenses (US inflation) - the euro is falling compared to the dollar (exchange rate) - therefore, the euro is falling faster compared to US living expenses - but the euro is not necessarily falling faster compared to EU living expenses (EU inflation) Indeed, EU inflation and US inflation seem to be about the same, which means that the exchange rate change is not because one or the other is experiencing more inflation.
- jessermeyer 4y ago
  Falling relative to what?
pastor_bob 4y ago

de6u99er 4y ago

This is bad for Europe because our salaries (before tax) have already been lower than US salaries. Additionally we pay much more taxes than you guys on salaries (up to 50%) and on VAT (~20%). Means at the moment until salaries get inflation adjusted that we pay a premium price for everything.

deleted 4y ago
[deleted]
pastor_bob 4y ago
Canadians do just fine with a weak dollar, low pay, and high taxes
- peanuty1 4y ago
  Yet 80% of Waterloo computer science grads move to the US after graduating to enjoy a higher quality of life.
  - focom 4y ago
    Yep can confirm. If I had a Canadian passport, I would have no reason to stick to freezing Canada.
- aabhay 4y ago
  Yup. Canadians don't go bankrupt because of medical bills (the #1 leading cause of bankruptcies in the US)
  - threads2 4y ago
    Yeah but then wE DoN'T hAvE a ChOiCe iN dOcToRs.
  - rmatt2000 4y ago
    > #1 leading cause of bankruptcies in the US This isn't true. A certain well-known politician made this claim, but it turns out she counted everyone who had medical debt when they declared personal bankruptcy as a "bankruptcy caused by medical debt." If someone gambled away their home and incidentally had an unpaid doctor's bill, it's a stretch to call that a medical bankruptcy. https://www.theatlantic.com/business/archive/2009/06/why-elizabeth-warrens-new-bankruptcy-study-is-so-bad/18835/ https://www.theatlantic.com/business/archive/2009/06/why-eli...

chadash 4y ago

Well, it rounds to the same number. But if you really care about an arbitrary line being crossed, then just know that as of 21:31 UTC, the Euro is still slightly higher than the dollar at 1.0039618 and it has not dipped at or below 1.00 yet.

donatj 4y ago

The Yen has bounced around ¥100 to $1 since the early 90's. I've had a completely unfounded theory about it for years that the tighter two economies are linked, the more likely this is to happen. People dealing in both being more willing just to round one way or the other bringing it into some sort of homeostasis due to simpler in-head math.

aidenn0 4y ago
Until recently. it's been over ¥130 for a while now; at least some of my digial purchases are denominated in yen, so I've noticed the dollar strengthening.
jedberg 4y ago
The CAD/USD pair would be a counterexample to your theory. Our economies are pretty strongly linked, and usually CAD is about .75 USD, but it's gone as low as .60 and as high as 1.05 (although interestingly it almost always heads back down if it hits 1.0).

steviedotboston 4y ago

1 liek = 1 prayer

yieldcrv 4y ago

Euro is my new favorite USD stablecoin

buzzwords 4y ago

This because Euro is falling in value (probably faster than USD is falling in value)

nivenkos 4y ago

dodgerdan 4y ago
France, Italy and Germany’s economic comfort is absolutely meaningless in the face of what Russia is doing. You haven’t figured out the fact that peace with Russia is a country being invaded, looted, with thousands murdered, war crimes and abuses? But wait there’s more, a few years later the Russians do it again.
- IdiocyInAction 4y ago
  A country no EU nations had any defense obligations to.
happyopossum 4y ago
Yeah, it would be great if Putin withdrew from the war so countries could consider something like that, but...
kergonath 4y ago
I am not sure we are living on the same continent. Europe has not entered the war; the war has entered Europe, on a Russian tank. “Europe” (whoever this is) cannot withdraw from the war. The war will be thee until either Ukraine or Russia bleeds dry. And if it is Ukraine, then it will be only a start of political and economical instability.
- IdiocyInAction 4y ago
  Germany and the rest of the western EU nations could decide to stop arming Ukraine and stop doing sanctions against Russia.
  - kergonath 4y ago
    Idiocy in action, indeed.

ggregoire 4y ago

I just checked a few mainstream European news sites and none of them are talking about it. (might be cause it's midnight?)

dkjaudyeqooe 4y ago
Because it hasn't happened yet. It might not happen. When it actually happens you'll see 0.99 something. The OP jumped the gun.

partiallypro 4y ago

Germany, and by extension Europe, abandoning nuclear power and making itself more dependent on a country historically at odds with the rest of Europe will go down as one of the biggest political/economic blunders of the century. Germany is such a powerful economy in Europe that it being so dependent on Russian gas will effect every country and they will all collectively suffer. It's also pathetic that both the US and EU both now have to go beg other bad actors for oil/gas.

nivenkos 4y ago
Whilst I support nuclear power, it's not the main issue, but the lack of progress in electrification of industry and homes. A lot of processes and heating still use natural gas directly, and that is what is causing the threat of industrial shutdowns. Many countries have already switched to coal for electricity generation - https://www.reuters.com/business/energy/netherlands-activates-energy-crisis-plan-removes-cap-coal-plants-2022-06-20/ https://www.reuters.com/business/energy/netherlands-activate...
option 4y ago
interesting fact - Ukraine in the middle of war now sells electricity for profit to Europe because they haven’t completely abandoned nuclear. This is even despite the fact of them losing their largest nuclear plant (in Zaporizhja) to russia. Germany’s decision to abandon nuclear is one of the most stupid ones ever.

BryanBeshore 4y ago

Reminds me a bit of the Dollar Milkshake Theory

senectus1 4y ago

Friend of mine says this appears to be the "$1 milkshake effect" https://www.theinvestorspodcast.com/episodes/the-dollar-milkshake-theory-update-w-brent-johnson/ https://www.theinvestorspodcast.com/episodes/the-dollar-milk... The USD FIAT is sucking the liquidity out of the other markets.

KronisLV 4y ago

I manage most of my investments through my bank: basically funds that represent a certain part of the industry, managed by external firms. I have invested in quite a few different ones, everything from the technology sector, to biotech, to emerging industries funds. Compared to about 5 years ago, the total value had increased by about 40% from what it was initially. This year? Everything's back to around 0% - some of those are in the red, some have measly value increases, but overall it's just like stashing money in a sock somewhere, instead of actually investing it. In a sense, it's telling of the greater situation economically - and that's even when you ignore the funds that had some Russian investments as a part of the portfolio (the trading of which was suspended altogether). When you consider the inflation that we're having here (Latvia) and now also the situation with the overall value of Euro, it doesn't look too good, to be honest. But hey, I'm paid comparatively little anyways and people working at US companies probably make in a month what I make in a quarter, so no point in crying over insignificant amounts of money. I'll continue to have some financial stability, just will never have things like nice cars or owning my own housing at this rate.

PeterStuer 4y ago

Well. For us computer geeks the "euro price is the dollar price" has been a thing for decades.

caycep 4y ago

Low euro should make exports more competitive, no? I remember after 2008, greece and other countries, couldn't devalue currency enough to help them get out of the recession as they were all tied to the euro; that extended their pain longer than otherwise would have been expected.

purplepatrick 4y ago

And that’s a good thing. Heavily export-dependent economies such as Germany that have outsized influence on EU’s economic performance need a weak Euro in this time of crisis.