when if ever do you think the dollar will rise above euro again?

Question

every year is getting worse! do you think the dollar will rise again or is it a steady downhill ? I wish I could understand why. isn't it detrimental to us economy? the wars haven't helped much economically. any comment with insight would be greatly appreciated. thanks.

Answer 1

Its because Eurpoe and the rest of the world are doing less business with the US. That will eventually have a detrimenal effect on the econmy as cheaper products come in from asia & eastern europe....forcing the dollar ever further down,

Answer 2

You may be confused because the question doesnt really make sense! The notional levels of currencies have no meaning - there are 115 yen to a dollar for example - it just depends how you count. Theres no reason why one dollar and one euro should be the same purchasing power.

The exchange rate between currencies varies as the economies change. In the very very long run, the exchange rate should change so that the price of say a CD costs the same in $ everywhere once the exchange rate is applied. But in the shorter term, the exchange rate gets moved around by all sorts of things - the business cycle, politics, terrorism - just all sorts of things that affect the likely real wealth of an economy, and its inflation rate, going forward.

My shorthand is to say that the overall exchange rate for a currency like $ or £ - weighted against all possible currencies - will be roughly stable if the economy grows at trend and if inflation is low and stable. If conditions deviate from that in the US then its exchange rate is likely to weaken. So if macro economies and politics were stable then the exchange rates wouldnt change much.

One reason why things are so volatile is that financial markets look to the future and extrapolate everything that happens now into the future. That amplifies any changes.

Answer 3

The impact of exchange rates on an economy is pretty much non-existent. Higher value of domestic currency is good for those who depend on imported inputs. Lower value of domestic currency is good for those who export or compete with imports. Economy-wide, it's almost a wash. Additionally, the majority of economy-wide output (about 70%) are services, which are by and large consumed and produced domestically, so they neither depend on imported inputs nor compete with imports.

As to whether the dollar will ever rise above the euro again, it depends mainly on inflation differentials between the U.S. and Europe. There was a time when British pound was worth about $5, but over the last 100 years or so, Britain has experienced higher inflation compared to the U.S. (largely because of its greater involvement in the two world wars), so the pound dropped to $2...

Answer 4

the simplest answer is that Americans find it to easy to get credit and are a consumption based society there cars burn to much fuel and there government prints money with no value based on the global economy sole based on the amount of oil sold they only went to war with Iraq because sad man Hussein wanted to sell his oil in euros and not dollars effectively collapsing the American economy George wouldn't stand for this and has basically threatened anyone Else who has made this move as well Iran and Syria to mention two the rest of the world is now paying for Americans fuel consumption which is still the cheapest per litre than anywhere Else so to increase the value of the dollar in the global market American are going to have to stop using there cars and start saving money all though i will be shopping there cause the exchange rate is to good to be true and at some point the dollar is going to be worth less than the paper its printed on having said that 20% of americans are of italian decent and are used to spending 10000000 on a pint of milk

Answer 5

Income of $100 per week. Spend $99. Result -Happiness.
Income of $100 per week. Spend $101. Result-Misery.
As this is the government we are talking about they have to print more money to make up for the shortfall with the result that the money is worth less.
You really don´t have to be an economist to understand the above.

Answer 6

Australian dollar has gradually risen over the last two years.It was once as low as 71.00c US..Now it is nearly 90.00c US.
I doubt the American $$ will ever be surpassed by any other economy,you have too much power,not that its a bad thing.Although bush is spending millions in Iraq and Afghanistan,I would be concerned if I was a US citizen,I'm concerned anyway!!

Answer 7

with China rising and Europe being able to trade easier with the rest of the World the US is losing economic ground and will probably continue to do so as the World balances out due to globalisation. Then, unless there are regional or global conflicts or events that upset the balances, it will rely on continental politics and shifts to displace currencies.

I think.

Answer 8

If the Dow lost about 5,000 or 6,000 points the dollar bulls would be out in force, knocking the Central Bank back quite a bit I fear.

Answer 9

The wars haven't helped much?
Watch this 45-minute film and get yourself enlightened as to why possible the wars haven't worked ... and why you will always work to look after the ones that make sure wars will never stop :-(
http://video.google.com/videoplay?docid=497251819335380093

Answer 10

Dont know about an answer, but you're cute!