€1 = $1.51+

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

The euro today is up over a dollar and a half at mid-market interbank rates. All of the local eastern European currencies, even the Romanain lei, are also rising against the dollar. While that might be welcome for Europeans visiting the US, it is not good news for Americans wanting to come over here. And it is even worse news for us expats who get paid in dollars. But at least my rent is contracted long term in dollars and I got rid of every dollar I could last week when rates were particularly favorable into euros, Swiss francs, and local currency.

[kapish Super Moderator Find all posts View Profile Close kapish]

Sell US goods in EU & Welcome EU tourists to visit US!!

I think this is supposed to be good - especially when selling US goods in Europe, correct?

Good for the deficit too!

Let us promote US cities and vacation spots for the European folks to come visit and spend their money. We need all we can get

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

This is great for US Exports to Europe. And, I think it is time to short the Euro. I think I'll sign up for a Forex account and short enough to pay for a trip to Europe if the Euro drops back down to 1.25.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

The problem that cheap dollar advocates seem to forget is that the dollar is a major reserve currency held by a lot of central banks. With this downward curve, it does not make a good reserve currency any more. If several central banks start dumping dollars it could send the currency into a death spiral, and Americans could learn how German felt in the 1920's.

Hopefully, the market will adjust back some after it digests the news about the latest fed rate cut, but if the snowball starts rolling too fast, watch out.

It is not just the €. I just returned from Switzerland, where the Swiss frank is now 92 cents. I remember when it was at 23 cents.

[bigfrank Administrator Find all posts View Profile Close bigfrank]

I went to Europe when the dollor was worth about 75 cents 2 years ago, Last year it was worth about 65 cents when I was there and let me tell you it hurt. Now that it is worth less than that I will not be planing on going back any time soon.

[funtime2 Senior Member Find all posts View Profile Close funtime2]

Glad I don't have a trip to Europe in the plans for the future.....

[bigfrank Administrator Find all posts View Profile Close bigfrank]

This could be one main reason why we are seeing more Europe in the Exchange opps forum and maybe slightly less US/Mexico.

[Sydney Contributor - Bronze Find all posts View Profile Close Sydney]

TIf several central banks start dumping dollars it could send the currency into a death spiral, and Americans could learn how German felt in the 1920's.

As long as the U.S. doesn't just start printing money, there's no danger of that happening.

This is great for US Exports to Europe. And, I think it is time to short the Euro. I think I'll sign up for a Forex account and short enough to pay for a trip to Europe if the Euro drops back down to 1.25.

I am so tempted too but have just been burnt by shares.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

As long as the U.S. doesn't just start printing money, there's no danger of that happening.

If the dollar were not a major reserve currency, we would have control by whether or not we turned on the printing presses full speed. However, with huge amounts of dollars out there with central banks, we no longer are fully in the dirvers seat. Fortunately, the biggest holders of dollars like the Red Chinese, realize that they would shoot themselves in the foot to start openly dumping dollars. Where the danger lies of such a trend developing is with countries with less to lose.

And it doesn't have to even be countries. There are huge numbers of dollars floating around overseas. I remeber The Economist magazines analysis of why European currencies all started going downhill in a big way in the run-up to the euro, even through the market fundamentals of those currencies were much better than the dollar at the time. First they were all tied together in the euro exchange rate mechanism, so what impacted one impacted all. The problem currency was the Deutsche Mark, which because of its strength was widely held as ''mattress money'' by eastern Europeans who did not trust either their own cureency or banks and also as ''suitcase money'' by organizaed crime who could not use banks for obvious reasons. In the run-up to the euro, each of these groups in the preceding months was dumping marks for dollars, and it added up to a huge run on the mark, and by extension, all other currencies tied to the euro exchange rate mechanism.

Now, dollars are also presently widely held as mattress money and suitcase money. If the slide in dollar value gets to the point that these holders panic and start dumping dollars, it could well have the same impact as several central banks doing so. And if some smaller central banks then also panic and join in, the death spiral of the dollar could have well begun.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

Well, the slide continues. The € is now at over $1.52 while the Swiss frank is over 95 cents.

[kapish Super Moderator Find all posts View Profile Close kapish]

I work for a computer networking company, and when the dot com bust happened, the only reason we survived is because we were able to sell well in Europe and Asia.

I hope the same applies now as well. I sure hope more US goods are sold outside the US thus letting our customers take advantage of the weak dollar.

[ArtsieAng Super Moderator Find all posts View Profile Close ArtsieAng]

Well, the slide continues. The € is now at over $1.52 while the Swiss frank is over 95 cents.

I was really hoping to spend a couple of weeks in Europe next summer. This is really making me think twice about going.

Last year when I was there, we were getting between 65-70 cents to the dollar, and that was bad enough. I hope this turns around, or I'll be looking for alternative locations.

[Sydney Contributor - Bronze Find all posts View Profile Close Sydney]

At least it's a good time to visit the U.S.

[Myhottoddy Junior Member Find all posts View Profile Close Myhottoddy]

I will not be traveling outside the USA except to Mexico until the exchange rates improve substantially. Memories and pictures from past trips to GB, Germany, Austria and Paris will have to sufice! There are lots of places to visit here in the USA within driving distance or for less than an exorbinate cost of airfare.

Tom

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

I think this is supposed to be good - especially when selling US goods in Europe, correct?

Good for the deficit too!

Let us promote US cities and vacation spots for the European folks to come visit and spend their money. We need all we can get

This is an illusion.

One of the big impacts of a sinking dollar is that it pushes up the price of oil, partly due to the fact that oil is priced in dollars. Oil is also often used as a hedge against a sinking dollar. When one considers all of the oil that the US imports, a higher price of oil can hurt us a lot more than the help provided by an increase in some of our exports. Of course, it also doesn't help that Congress will not let us drill for our own oil in Alaska.

The strong dollar policies of the Clinton administration were much better for the US economy than the weak dollar policies of the Bush administration.