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Where do you think the euro is going from here - stability, decline in value, or oblivion?
Having read lots of opinions on the subject, IMHO the euro will likely lose value and may even implode completely. For the short term, as long as the Chinese keep quietly buying euros on the market, it will not take a dramatic plunge, but the question is how long the Chinese will perceive it in their interests to do so. They have signalled that they will not dump big money into rescue bonds for the eurozone. Indeed, there does not seem to be anyone ready to put up the money for the ''big bazooka'' level of the rescue fund, and without that, there is no way the EU can easily rescue Italy or Spain.
The most likely scenario, IMHO, is that eventually the German leadership will allow the European Central Bank to print money for massive quantitative easing. That means the PIIGS stay afloat and the euro continues to exist, but the massive money printing that would be necessary would substantially devalue the currency. That in turn will spell a change in leadership in Germany, where the lessons of the post-WWI inflation are still deeply remembered.
Then again, maybe they will not, in which case the Italy and others default, the euro implodes, and the world economy is hit hard.
I have been dumping my own euros and now only hold a nominal amount for upcoming trips but have not had any as personal savings for a while. The currencies I have been adding to, British pounds, Swiss francs, and Norwegian kronor are no longer availible at a decent price, so I am retaining more dollars by necessity. I used to be able to buy Swiss francs and British pounds at very close (sometimes even less) than the mid-market interbank rate. For the last two to three months, however, buying Swiss francs meant giving a five percent exchange loss, and British pounds a three percent exchange loss. I would like to hold some loonies (Canadian dollars), a currency with good fundamentals, which also used to be availible here at very close to mid-market rates, but now require a three percent exchange loss when you can find them.
Having read lots of opinions on the subject, IMHO the euro will likely lose value and may even implode completely. For the short term, as long as the Chinese keep quietly buying euros on the market, it will not take a dramatic plunge, but the question is how long the Chinese will perceive it in their interests to do so. They have signalled that they will not dump big money into rescue bonds for the eurozone. Indeed, there does not seem to be anyone ready to put up the money for the ''big bazooka'' level of the rescue fund, and without that, there is no way the EU can easily rescue Italy or Spain.
The most likely scenario, IMHO, is that eventually the German leadership will allow the European Central Bank to print money for massive quantitative easing. That means the PIIGS stay afloat and the euro continues to exist, but the massive money printing that would be necessary would substantially devalue the currency. That in turn will spell a change in leadership in Germany, where the lessons of the post-WWI inflation are still deeply remembered.
Then again, maybe they will not, in which case the Italy and others default, the euro implodes, and the world economy is hit hard.
I have been dumping my own euros and now only hold a nominal amount for upcoming trips but have not had any as personal savings for a while. The currencies I have been adding to, British pounds, Swiss francs, and Norwegian kronor are no longer availible at a decent price, so I am retaining more dollars by necessity. I used to be able to buy Swiss francs and British pounds at very close (sometimes even less) than the mid-market interbank rate. For the last two to three months, however, buying Swiss francs meant giving a five percent exchange loss, and British pounds a three percent exchange loss. I would like to hold some loonies (Canadian dollars), a currency with good fundamentals, which also used to be availible here at very close to mid-market rates, but now require a three percent exchange loss when you can find them.
but somehow they've rebounded. I hope the Euro can rebound as well but very unnerving for those who have to use it. 
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