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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

#61

Post by 01100011 »

thiago_fm wrote: post #45

This is great for German exports. Expect to see more Mercedes Benz in the streets of America. It generates some inflation as imports are pegged to the dollar(somebody mentioned that it is hedged, it is just by some extent), but overall is actually good for the economic block. The EU needs to export to survive. The EU has been fighting a possible deflation for most of the 2010s, this is actually not so negative as peo…

This thesis only holds if MB can afford to keep running its factories. Modern economies cease to function without energy, or when the price of that energy is sufficiently high.

Re: Euro falls below parity with the dollar

#62

Post by BenjiWiebe »

nine_zeros wrote: post #54

EU is lucky they invested in rail lines and trains. The average person can at least attempt to stop using gas guzzlers and keep living their life. If the USD falls and oil prices rise, we in America are screwed. We almost had it handed to us this summer.

Would it really be that bad?

Now I work very close to home, but when I didn't, I'd meet people commuting the other way. If it was no longer profitable to commute, we could either move to be closer to our job or switch jobs to be closer to home.

Re: Euro falls below parity with the dollar

#63

Post by simonh »

cloutchaser wrote: post #52
ladyanita22 wrote: post #43

Earlier quoted context omitted.

I'd bet it has much more to go with the US shale oil industry. In Europe you can't do fracking

Its both really. In Europe you can’t do innovation, or it’s an order of magnitude more expensive.

You can do innovation, the problem is scaling up to the mass market. The EU is supposed to be a massive single market at scale to rival the US and China, and in some ways it is, but it still has a fragments cultural and legal landscape. The gravitational pull of the US on European dev talent is really hard to ignore. Every year the cream of European IT graduates move to the US because that's where the big companies and top paying jobs are. It's a powerful self-reinforcing feedback loop.

Re: Euro falls below parity with the dollar

#64

Post by simonh »

FranzFerdiNaN wrote: post #58
cloutchaser wrote: post #52

Earlier quoted context omitted.

Its both really. In Europe you can’t do innovation, or it’s an order of magnitude more expensive.

You mean you cant do innovation without dumping the cost on society. Someone is paying for the price difference.

Nobody is willing to pay the price difference, that's why scaling up big tech in Europe natively doesn't happen. If someone were paying it, then we would have big tech natively in Europe, and we haven't.

Re: Euro falls below parity with the dollar

#65

Post by tantaman »

legulere wrote: post #36
debacle wrote: post #21

Just for fun, I took a look at GBP/USD and it looks like that is tanking as well. Meanwhile the ruble is stronger than it's been in 4 years. For people in the EU/UK, how has this currency slide impacted your day to day?

The ruble is so strong because russia cannot spend money anymore because of sanctions. I'm living in Germany, the biggest problem is the inflation caused by energy prices. It's still lower than in the US or the UK, but people are starting to struggle. Business is going well as Germany is mostly export-driven, but companies don't want to give out rises.

I think it's that Russia is pegging the Ruble to a fixed value of gold and requiring all nations importing from Russia to use Rubles to buy their Russian exports.

The only way to get Rubles to buy your imports is to give Russia gold at the rub-gold exchange rate set by Russia.

This peg, iiuc, is one-way. As in, Russia gives you X rubles for Y gold. You can't, however, redeem your rubles the other way around.

So... is the Ruble really strong? idk.. it all sounds very artificial given exchange is only in one direction.

Re: Euro falls below parity with the dollar

#66

Post by simonh »

thiago_fm wrote: post #45

This is great for German exports. Expect to see more Mercedes Benz in the streets of America. It generates some inflation as imports are pegged to the dollar(somebody mentioned that it is hedged, it is just by some extent), but overall is actually good for the economic block. The EU needs to export to survive. The EU has been fighting a possible deflation for most of the 2010s, this is actually not so negative as peo…

>This is great for German exports. Expect to see more Mercedes Benz in the streets of America.

A lot of MB sold in the UK are made in Mexico.

Re: Euro falls below parity with the dollar

#68

Post by brundolf »

nine_zeros wrote: post #54

EU is lucky they invested in rail lines and trains. The average person can at least attempt to stop using gas guzzlers and keep living their life. If the USD falls and oil prices rise, we in America are screwed. We almost had it handed to us this summer.

The problem they're having is with natural gas, which they need for winter heating

Re: Euro falls below parity with the dollar

#69

Post by maeln »

mg wrote: post #33

Every article about the EUR/USD ratio talks about gas prices. But the current rise of the Dollar started 15 years ago. Over these 15 years, it has become more and more apparent, that software is eating the world. And the US keeps extending their lead in this area. I would not be surprised if that contributes to a long term trend in the EUR/USD ratio. (I'm sitting in a cafe in Germany, writing this text on laptop made…

The trading cost of a currency is hardly impacted by one industry outperforming. Financial policies have a much stronger impact when it comes to currencies. Right now, the U.S and the E.U (and its member) are not handling the current rise in inflation the same way, after also not handling the COVID relief efforts in the same way. Just look at the graph[1] the fall of the EUR as started since January 2021.

[1] https://www.xe.com/currencycharts/?from=USD&to=EUR&view=5Y

Re: Euro falls below parity with the dollar

#70

Post by KingOfCoders »

unpopularopp wrote: post #39

> German economy, among the most exposed to disruptions in Russian gas supply, is "likely" to suffer a recession over the winter if the energy crisis continues to deepen At this point I feel the EU is pretty much done and the war just showed how weak the EU leadership is along how individual member nations acting sometimes totally against each other (see France doubling down on nuclear while Germany does the opposite…

Let the Russians bomb and invade Washington State and we'll see how the dollar does.
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