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Euro falls below parity with the dollar

reuters.com

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Re: Euro falls below parity with the dollar

#11

Post by wirrbel »

nopehnnope wrote: post #4
viraptor wrote: post #2

The title of this makes me annoyed. What parity? They're both abstract made up units that happened to be even on a random scale for a while. This is financial numerology :-( (yes, I know there's more content and "this week's currency summary" sounds less fun and I should chill out)

Parity can just mean equal. And the Euro’s creators clearly targeted a value similar to the dollar.

Fairly certain that Germany pushed for the value with an easy conversion (2 Deutsche Mark = 1 EUR) and not for dollar-similarity.

Exchange rate was 1 EUR for 1,95583 DM

Re: Euro falls below parity with the dollar

#12

Post by viraptor »

nopehnnope wrote: post #4
viraptor wrote: post #2

The title of this makes me annoyed. What parity? They're both abstract made up units that happened to be even on a random scale for a while. This is financial numerology :-( (yes, I know there's more content and "this week's currency summary" sounds less fun and I should chill out)

Parity can just mean equal. And the Euro’s creators clearly targeted a value similar to the dollar.

Well, this led me to learn something from my stupid comment. Originally the EUA (https://en.wikipedia.org/wiki/European_Unit_of_Account - euro's grandparent) started at 1:1 with USD. (and quickly diverged) TIL

EUA was exchanged 1:1 for ECU, then 1:1 for EUR, so that's a nice continuation.

Re: Euro falls below parity with the dollar

#13

Post by croes »

wirrbel wrote: post #11
nopehnnope wrote: post #4

Earlier quoted context omitted.

Parity can just mean equal. And the Euro’s creators clearly targeted a value similar to the dollar.

Fairly certain that Germany pushed for the value with an easy conversion (2 Deutsche Mark = 1 EUR) and not for dollar-similarity. Exchange rate was 1 EUR for 1,95583 DM

And then some sellers converted 1DM = 1€

Re: Euro falls below parity with the dollar

#14

Post by detaro »

smcl wrote: post #5
viraptor wrote: post #2

The title of this makes me annoyed. What parity? They're both abstract made up units that happened to be even on a random scale for a while. This is financial numerology :-( (yes, I know there's more content and "this week's currency summary" sounds less fun and I should chill out)

I suppose "Euro falls to historic low against dollar" might have sufficed as a headline, but highlighting the relative values and the 1:1 threshold that was crossed (no matter how abstract it technically is) could help more readers connect with the story a bit more

Doesn't "historic low" mean "lowest it ever was in history"? That's not the case (yet).

Re: Euro falls below parity with the dollar

#15

Post by caf »

viraptor wrote: post #2

The title of this makes me annoyed. What parity? They're both abstract made up units that happened to be even on a random scale for a while. This is financial numerology :-( (yes, I know there's more content and "this week's currency summary" sounds less fun and I should chill out)

Might as well get annoyed at people for celebrating anniversaries. It turns out that noting arbitrary patterns in numbers is just a common way to observe changes in continuously-measured values.

Re: Euro falls below parity with the dollar

#16

Post by Workaccount2 »

viraptor wrote: post #2

The title of this makes me annoyed. What parity? They're both abstract made up units that happened to be even on a random scale for a while. This is financial numerology :-( (yes, I know there's more content and "this week's currency summary" sounds less fun and I should chill out)

Given that they are both traded, they're really "abstract made up units" at least no more than than anything else you buy is. There is an enormous market consensus that determines the value of dollars and euros.

The key takeaway given that is that the market is either losing confidence in the eurozone, gaining confidence in the US, or most likely; both.

Re: Euro falls below parity with the dollar

#17

Post by jaclaz »

wirrbel wrote: post #11
nopehnnope wrote: post #4

Earlier quoted context omitted.

Parity can just mean equal. And the Euro’s creators clearly targeted a value similar to the dollar.

Fairly certain that Germany pushed for the value with an easy conversion (2 Deutsche Mark = 1 EUR) and not for dollar-similarity. Exchange rate was 1 EUR for 1,95583 DM

>Fairly certain that Germany pushed for the value with an easy conversion (2 Deutsche Mark = 1 EUR) and not for dollar-similarity. >Exchange rate was 1 EUR for 1,95583 DM

I don't think so, the same happened for the old Lira in Italy, 1,936.27=1 €, that everyone rounded to 2,000=1 €, or for the Portuguese Escudo, around 200=1 €, it should be just a coincidence:

https://en.wikipedia.org/wiki/History_of_the_euro#Currency_t...

The conversion was based on exchange rates on 31 December 1998 for the initial Euro members.

Re: Euro falls below parity with the dollar

#18

Post by randomdata »

viraptor wrote: post #2

The title of this makes me annoyed. What parity? They're both abstract made up units that happened to be even on a random scale for a while. This is financial numerology :-( (yes, I know there's more content and "this week's currency summary" sounds less fun and I should chill out)

> They're both abstract made up units that happened to be even on a random scale

They are salable assets with a price that people are willing to pay to acquire them. It is no more abstract than a hypothetical report on how a house in New York City is now worth less than a house in Wichita. Numerology implies some kind of mystical force. This is simply observation of measured human behaviour.

Re: Euro falls below parity with the dollar

#19

Post by formerly_proven »

detaro wrote: post #14
smcl wrote: post #5

Earlier quoted context omitted.

I suppose "Euro falls to historic low against dollar" might have sufficed as a headline, but highlighting the relative values and the 1:1 threshold that was crossed (no matter how abstract it technically is) could help more readers connect with the story a bit more

Doesn't "historic low" mean "lowest it ever was in history"? That's not the case (yet).

Interestingly the Google exchange rate chart has historical rates for EUR/USD going back to 1982. Wonder where those numbers are coming from...

Re: Euro falls below parity with the dollar

#20

Post by viraptor »

Workaccount2 wrote: post #16
viraptor wrote: post #2

The title of this makes me annoyed. What parity? They're both abstract made up units that happened to be even on a random scale for a while. This is financial numerology :-( (yes, I know there's more content and "this week's currency summary" sounds less fun and I should chill out)

Given that they are both traded, they're really "abstract made up units" at least no more than than anything else you buy is. There is an enormous market consensus that determines the value of dollars and euros. The key takeaway given that is that the market is either losing confidence in the eurozone, gaining confidence in the US, or most likely; both.

Correct, every other traded value has the same meaningless in reality, but psychologically cute thresholds. Same as articles about some stock price crossing a (round number).

> The key takeaway...

Yes, and that's the useful information.

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