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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

#201

Post by pjmlp »

MomoXenosaga wrote: post #143
fzfaa wrote: post #116

Earlier quoted context omitted.

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.

It's like the US: young people move from poor states to rich ones. Nobody in America ever talks about the basket case that is Alabama. People have been moving into New York and California for a hundred years. Anecdotal: My dentist was from Rumenia. I'm sure they need dentists too but he can make more money in the Netherlands.

Likewise the doctors in Netherlands move to Denmark, and the circle goes on.

Re: Euro falls below parity with the dollar

#202

Post by layer8 »

candiodari wrote: post #152
jmnicolas wrote: post #75

Earlier quoted context omitted.

If the ECB raises interest rates most European nations wouldn't be able to pay their debts. It's an untenable situation, something will have to give.

But it's nowhere near the braking point, in fact it isn't nearly as bad as the PBOC or, arguably, the BOJ and the FED (per person EU debt is still less than the US), so they definitely still have the option to kick the can down the road. Ergo, you can safely bet both your kidneys that nothing's going to happen. It's crazy how hard it is to make 1 European country agree on finances these days, all the EU member nation…

Switching to private pensions is difficult because it would only work for the younger part of the population who would still have enough time to save/invest money for their pension, but the state would still have to finance the pensions for the older half for a couple of decades, without getting fresh money in from the younger half. This is made even more difficult by an aging demographics.

Re: Euro falls below parity with the dollar

#203

Post by TechBro8615 »

nine_zeros wrote: post #136
TechBro8615 wrote: post #71

Earlier quoted context omitted.

If USD falls against what? Exchange is only meaningful with a counterparty.

USD falls against oil price.

But you said “if USD falls and oil prices rise.” It sounds like you’re double counting “USD.” Otherwise there is a missing variable here.

Re: Euro falls below parity with the dollar

#204

Post by margalabargala »

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.

There is not, and never has been, anything going on in the world of monetary economics other than tech. Going back thousands of years.

"Tech" is a force multiplier, whether that tech is factories, steam engines, gunpowder, chariots, printing presses, or software. The people who have the best mastery of the currently-most-useful force-multiplier tech at a given time tend to do very well.

Software, broadly, just currently happens to be the most useful force multiplier. That may change to the subset of software that is ML, or it may change to robotics, or something else entirely like synthetic bio.

Re: Euro falls below parity with the dollar

#205

Post by b112 »

blibble wrote: post #171
b112 wrote: post #129

Earlier quoted context omitted.

Yet the article does not explain how a "gas crisis" leads to a weaker currency. One thing I find weird (a touchy point?) is that the UK left. Yes, that was a few years ago, but my point is historical EU / Euro pricing is now diminished overall, in its up/down cycle. COVID threw this asunder, so we did not see true fiscal results from UK leaving. And the UK left over a few years, making the departure less dramatic. Th…

the UK never joined the euro the europhiles in the UK attempted the first steps of joining (ERM1), which pegged the pound with the deutschmark it was forced out when George Soros and friends attacked the peg on Black Wednesday immediately prior to this the ERM was known an the Eternal Recession Mechanism (which is now exactly what the euro is)

Interesting info, and thanks, but I still contend that a large economic zone shrunk by 20%, and that this has an impact.

Re: Euro falls below parity with the dollar

#206

Post by fzfaa »

pjmlp wrote: post #200
fzfaa wrote: post #116

Earlier quoted context omitted.

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.

Yet when we move north we are able to be productive, so maybe we are failing to bring that cultural change back home.

Of course: those who move north do so because they do not share the cultural shortcomings of the south. Therefore they are self-selecting.

Re: Euro falls below parity with the dollar

#207

Post by rightbyte »

swamp40 wrote: post #131
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?

I've always had this cognitive dissonance as well. Especially the link between rising interest rates and lowered food prices. I always ask and get ignored. I suspect it's because that's all they can really do. They are a one trick pony.

Ye it is all baloney. Higher rates gives more money to those with piles of money. Low interest rates does the same but in form of loans.

Neither sounds like they decrease inflation.

Re: Euro falls below parity with the dollar

#208

Post by nine_zeros »

TechBro8615 wrote: post #203
nine_zeros wrote: post #136

Earlier quoted context omitted.

USD falls against oil price.

But you said “if USD falls and oil prices rise.” It sounds like you’re double counting “USD.” Otherwise there is a missing variable here.

Sometimes USD falls and oil prices fall together. The measure of USD is only accurate when measured against oil price, and it helps to precisely say it so as to avoid questions such as "If USD falls against what?"

Re: Euro falls below parity with the dollar

#209

Post by s1artibartfast »

pjmlp wrote: post #201
MomoXenosaga wrote: post #143

Earlier quoted context omitted.

It's like the US: young people move from poor states to rich ones. Nobody in America ever talks about the basket case that is Alabama. People have been moving into New York and California for a hundred years. Anecdotal: My dentist was from Rumenia. I'm sure they need dentists too but he can make more money in the Netherlands.

Likewise the doctors in Netherlands move to Denmark, and the circle goes on.

Not a circle, a ladder

Re: Euro falls below parity with the dollar

#210

Post by NoMAD76 »

spywaregorilla wrote: post #83
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 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: The producer prices are rising because of the gas prices

Just wanted to add that prices are also rising because of higher transportation costs (sea, land, air), all are on the rise.
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