Euro falls below parity with the dollar • Hacker News Board

Re: Euro falls below parity with the dollar

#111

Post by f6v » Mon, Aug 22, 2022, 2:39 PM UTC

KingOfCoders wrote: post #70

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.

Ukraine is not in EU and shouldn’t be there.

Re: Euro falls below parity with the dollar

#112

Post by Jochim » Mon, Aug 22, 2022, 2:39 PM UTC

brundolf wrote: post #92

Jochim wrote: post #81

Earlier quoted context omitted.

Petroleum prices also spiked, probably related to the war in Ukraine but I'm not 100% sure.

Yeah but my understanding is natural gas is the real driver of crisis for Europe right now, esp Germany, but Americans sometimes misunderstand when it's referred to as just "gas"

Yeah, that's fair enough. Sadly the natural gas shortage affects more than just winter heating, in the UK at least it's one of the main factors of the price of electricity. All of this has had a knock on effect that goes way beyond just the price of heating.

Re: Euro falls below parity with the dollar

#113

Post by tacitusarc » Mon, Aug 22, 2022, 2:39 PM UTC

KingOfCoders wrote: post #70

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.

That’s an interesting question. It would realistically escalate to nuclear war. But I’d we set that aside, it’s not immediately obvious to me how the dollar would do. It might actually strengthen.

Re: Euro falls below parity with the dollar

#114

Post by jacquesm » Mon, Aug 22, 2022, 2:39 PM UTC

odshoifsdhfs wrote: post #103

fzfaa wrote: post #95

Earlier quoted context omitted.

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

The EU is a great idea, implemented in a way that leaves a lot to be desired. It certainly is a lot better than what came before, the economic gains are felt everywhere but not equally so. That's the thing that should change, unfortunately such change takes time.

Re: Euro falls below parity with the dollar

#115

Post by causi » Mon, Aug 22, 2022, 2:40 PM UTC

KingOfCoders wrote: post #70

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.

It's more like the Russians bombing and invading, say, Cuba.

Re: Euro falls below parity with the dollar

#116

Post by fzfaa » Mon, Aug 22, 2022, 2:40 PM UTC

jacquesm wrote: post #109

fzfaa wrote: post #95

Earlier quoted context omitted.

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.

I am from the south. We are wasting money and producing too little. We don't have the massive wealth of the north because we are culturally incapable of behaving some other way.

Re: Euro falls below parity with the dollar

#117

Post by clownpepe » Mon, Aug 22, 2022, 2:41 PM UTC

robjan wrote: post #108

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.

Just to clarify for the rest; the borrower (ECB) is literally printing new money every time they give out a loan.

Re: Euro falls below parity with the dollar

#118

Post by petesergeant » Mon, Aug 22, 2022, 2:42 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?

depends on how much the raw materials cost if they're coming from outside the EU, or if other people are competing on price for the raw materials

Re: Euro falls below parity with the dollar

#119

Post by mamonster » Mon, Aug 22, 2022, 2:42 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?

In financial markets its pretty simple: When you raise interest rates, you increase the denominator in the DCF calculation, so most assets are repriced downward.

Re: Euro falls below parity with the dollar

#120

Post by paganel » Mon, Aug 22, 2022, 2:43 PM UTC

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…

> What does lead to a weaker currency? O

Much more expensive gas means the German economy goes kaboom, which is exactly what is now happening (afaik Germany recently had the biggest trade deficit in 30 years or something). The EU economy as a whole largely, largely depends on the German economy. The Euro is the currency behind most of that EU economy.