Euro falls below parity with the dollar • Hacker News Board

Re: Euro falls below parity with the dollar

#101

Post by asldjajlfkj » Mon, Aug 22, 2022, 2:32 PM UTC

mellavora wrote: post #34

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?

Two responses saying "oil and gas are more expensive, but that is other causes"... forgetting that oil and gas are priced in dollars. So the exchange rate is certainly a cause (i.e. 20-30% of recent moves), though agree not the main cause (recent moves are > 100%, mostly due to Russia tightening the pipe).

For totally fungible assets (e.g. stocks) that’s true. Not so much for gas, where it is sold and bought with a regional restriction. Exchange rates are transparent to the market situation.

Re: Euro falls below parity with the dollar

#102

Post by causi » Mon, Aug 22, 2022, 2:34 PM UTC

mutatio wrote: post #79

yuan43 wrote: post #59

The headline is "Gas crisis sends euro back below parity against dollar." Yet the article does not explain how a "gas crisis" leads to a weaker currency. What does lead to a weaker currency? On the EU side, central bank accommodation in the face of inflation ripping higher. Germany recently logged a 37% YoY annual increase in producer prices: https://www.reuters.com/world/europe/german-economic-outlook... And the ECB…

The ECB has its hands tied behind its back, perfect storms like this highlight one of the benefits of a country having its own currency and fiscal policy - the ECB cannot move like UK/US as reconciling Greece/Italy and Germany/Northern Europe can't be done without massive pain for the south.

They've had thirteen years to stop their Wile E Coyote approach to fiscal policy and they've chosen not to do so because they wanted to ride the gravy train a little while longer. End of the line.

Re: Euro falls below parity with the dollar

#103

Post by odshoifsdhfs » Mon, Aug 22, 2022, 2:35 PM UTC

fzfaa wrote: post #95

mutatio wrote: post #79

Earlier quoted context omitted.

The ECB has its hands tied behind its back, perfect storms like this highlight one of the benefits of a country having its own currency and fiscal policy - the ECB cannot move like UK/US as reconciling Greece/Italy and Germany/Northern Europe can't be done without massive pain for the south.

It's time to inflict massive pain for the south. Can't spend any more decades wasting money.

Thank you, we appreciate it. Specially when just a few weeks ago Central Europe wanted the south to be solitary with the rest of Europe and save gas, gas they don't get from Russia and always paid more for.

This is why the EU is a stupid idea. When it is the south, they should suffer, when it is Central Europe, everyone should come together and sing kumbaya

Re: Euro falls below parity with the dollar

#104

Post by ElCheapo » Mon, Aug 22, 2022, 2:35 PM UTC

ejanus wrote: post #86

simonh wrote: post #63

Earlier quoted context omitted.

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 a…

How do you break that circle?

You can't. If your people do not feel the need to live humbly and serve their country they are going to flock elsewhere to the highest bidder. If a German engineer finds $30k/y after tax to be an unacceptable salary what are you going to do about it? Brainwash him into sacrificing for their glorious Fatherland and just shutting up and doing the work?

Re: Euro falls below parity with the dollar

#105

Post by rvense » Mon, Aug 22, 2022, 2:35 PM UTC

Can someone explain to me how raising interest rates combats inflation? Doesn't it do the opposite? If rates go up, financing becomes more expensive, meaning I'll need more money to do business, meaning I'll have to raise my prices to match?

Re: Euro falls below parity with the dollar

#106

Post by ElCheapo » Mon, Aug 22, 2022, 2:36 PM UTC

simonh wrote: post #64

FranzFerdiNaN wrote: post #58

Earlier quoted context omitted.

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.

Could you give an example of a technology that needs to be scaled up in Europe?

Re: Euro falls below parity with the dollar

#107

Post by f6v » Mon, Aug 22, 2022, 2:37 PM UTC

gls2ro wrote: post #31

I assume this should be good for EU economy on the long run? Like exports from EU to US are now more profitable. Or am I missing something? Can someone with more understanding/background explain how this might effect production and exports?

> I assume this should be good for EU economy on the long run?

If they could produce and export a lot of stuff. But that requires energy. At the current energy prices- forget it.

Re: Euro falls below parity with the dollar

#108

Post by robjan » Mon, Aug 22, 2022, 2:37 PM UTC

rvense wrote: post #105

Can someone explain to me how raising interest rates combats inflation? Doesn't it do the opposite? If rates go up, financing becomes more expensive, meaning I'll need more money to do business, meaning I'll have to raise my prices to match?

Borrowing becomes more expensive so it reduces the amount of cash sloshing around.

Re: Euro falls below parity with the dollar

#109

Post by jacquesm » Mon, Aug 22, 2022, 2:38 PM UTC

fzfaa wrote: post #95

mutatio wrote: post #79

Earlier quoted context omitted.

The ECB has its hands tied behind its back, perfect storms like this highlight one of the benefits of a country having its own currency and fiscal policy - the ECB cannot move like UK/US as reconciling Greece/Italy and Germany/Northern Europe can't be done without massive pain for the south.

It's time to inflict massive pain for the south. Can't spend any more decades wasting money.

They're not wasting money. They simply don't have the massive wealth of the North to jump off from or to cushion blows. On top of that a large quantity of what they do earn is spent on interest payments to the North.

Re: Euro falls below parity with the dollar

#110

Post by YetAnotherNick » Mon, Aug 22, 2022, 2:38 PM UTC

password1 wrote: post #99

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…

Please burst your bubble and consider that there is WAY more going on in the world than tech and software. The idea that you can point at something as complex as monetary economics and say "I know what's happening and I can trace it back to 15 years" is absurd and over-simplistic.

No big sector has seen similar level of YoY growth like tech. STOXX 600 is almost flat for last 20 years. While S and P 500 and Nasdaq rose 5-10 times over that period. While tech is not everything for the economy, it seems tech is everything for economy growth in past 30 or so years.