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Why would you want the euro to grow in prominence? The euro is an extremely young currency which lost almost 1/3 of its value against the USD over the past tw

by rank0 3y ago

Why would you want the euro to grow in prominence? The euro is an extremely young currency which lost almost 1/3 of its value against the USD over the past two years. …at a time when the dollar saw the worst inflation in 40 years!

olddustytrail 3y ago
When the Euro was introduced, it was set to be about the same value as $1. It's currently at $1.10 so it's actually stronger vs USD than it was initially.
The_Colonel 3y ago
> which lost almost 1/3 of its value against the USD over the past two years Two years ago on this day the exchange rate was ~1.2 USD per 1 EUR, today it is ~1.1, so the loss is ~9%. The current exchange rate is nothing extraordinary, and has been hit many times in the past years/decades.
- rank0 3y ago
  I stand corrected. I had my dates wrong. And had not realized the recent gains the euro has made after reaching 1:1 parity. My main point still stands though. Take a look at the historic volatility: https://www.macrotrends.net/2548/euro-dollar-exchange-rate-historical-chart https://www.macrotrends.net/2548/euro-dollar-exchange-rate-h... The exchange rate ~2010 hovered around 1.5 and recent dipped as low as 1:1 party. Compare that to something like the Swiss franc which has actually appreciated against the dollar over the same period and has a much longer history: https://www.macrotrends.net/2558/us-dollar-swiss-franc-exchange-rate-historical-chart https://www.macrotrends.net/2558/us-dollar-swiss-franc-excha...
  - The_Colonel 3y ago
    Your point doesn't really stand. You cherry-pick the years around 2008 to make your point, but it shouldn't be very surprising that USD was very weak back. In the years before, and after Great Recession, the exchange rate 1.1 is very boring average. Some currencies, like Swiss Franc may outperform EUR, but are not suitable as a large scale reserve currency.
    - rank0 3y ago
      I guess we just disagree on if the euro makes sense as a reserve currency. It’s too volatile for my taste. It observably performs poorly during times of panic. Almost all global trade is conducted in dollars. Inflation is much worse in the EU than the US. The ECB just follows the Fed, except worse. They maintained negative interest rates for a decade! Can you make a case for why the euro should be a reserve currency?

by rank0 3y ago

olddustytrail 3y ago

When the Euro was introduced, it was set to be about the same value as $1. It's currently at $1.10 so it's actually stronger vs USD than it was initially.

The_Colonel 3y ago

> which lost almost 1/3 of its value against the USD over the past two years Two years ago on this day the exchange rate was ~1.2 USD per 1 EUR, today it is ~1.1, so the loss is ~9%. The current exchange rate is nothing extraordinary, and has been hit many times in the past years/decades.

rank0 3y ago
I stand corrected. I had my dates wrong. And had not realized the recent gains the euro has made after reaching 1:1 parity. My main point still stands though. Take a look at the historic volatility: https://www.macrotrends.net/2548/euro-dollar-exchange-rate-historical-chart https://www.macrotrends.net/2548/euro-dollar-exchange-rate-h... The exchange rate ~2010 hovered around 1.5 and recent dipped as low as 1:1 party. Compare that to something like the Swiss franc which has actually appreciated against the dollar over the same period and has a much longer history: https://www.macrotrends.net/2558/us-dollar-swiss-franc-exchange-rate-historical-chart https://www.macrotrends.net/2558/us-dollar-swiss-franc-excha...
- The_Colonel 3y ago
  Your point doesn't really stand. You cherry-pick the years around 2008 to make your point, but it shouldn't be very surprising that USD was very weak back. In the years before, and after Great Recession, the exchange rate 1.1 is very boring average. Some currencies, like Swiss Franc may outperform EUR, but are not suitable as a large scale reserve currency.
  - rank0 3y ago
    I guess we just disagree on if the euro makes sense as a reserve currency. It’s too volatile for my taste. It observably performs poorly during times of panic. Almost all global trade is conducted in dollars. Inflation is much worse in the EU than the US. The ECB just follows the Fed, except worse. They maintained negative interest rates for a decade! Can you make a case for why the euro should be a reserve currency?