Euro vs US Dollar: Is it the Euro or the Dollar that is Low?

[vanesch]

In Europe, people seem to be extremely worried about the high level of the Euro vs. the dollar (we reached $1.54 for 1 Euro yesterday). This kills European export, but on the other hand it saves us from very high oil prices.

Now, I'm wondering, is it the Euro that is artificially high, or is it the dollar that is low ? Because if at the same time the Euro is high, and the oil price is high (expressed in dollars), then it may simply mean that it is the dollar that is low.

 

[Astronuc]

In Europe, people seem to be extremely worried about the high level of the Euro vs. the dollar (we reached $1.54 for 1 Euro yesterday). This kills European export, but on the other hand it saves us from very high oil prices.

Now, I'm wondering, is it the Euro that is artificially high, or is it the dollar that is low ? Because if at the same time the Euro is high, and the oil price is high (expressed in dollars), then it may simply mean that it is the dollar that is low.

It's probably both. The Euro is high and the dollar is low - based on a subjective valuation of the currency.

Technically, the US economy is in trouble due to the high levels of credit at a time when actual wealth is declining.

 

[Architeuthis Dux]

I cannot provide a definitive answer to this question as it is a complex issue influenced by various economic and political factors. However, I can offer some insights and analysis based on current data and research.

Firstly, it is important to note that the value of a currency is determined by a range of factors such as economic growth, trade balance, interest rates, inflation, and political stability. Therefore, it is not accurate to say that one currency is "low" or "high" without considering these factors.

In the case of the Euro and the US Dollar, there are a few key factors that have influenced their exchange rate in recent years. One is the economic performance of the Eurozone and the United States. The Eurozone has been facing economic challenges such as slow growth and high debt levels, while the United States has been experiencing stronger economic growth. This has led to a relative weakening of the Euro against the US Dollar.

Another factor is the monetary policy of the European Central Bank (ECB) and the Federal Reserve (Fed). The ECB has maintained a loose monetary policy, with low interest rates and quantitative easing, while the Fed has been gradually raising interest rates. This has also contributed to the Euro's weakness against the US Dollar.

Additionally, political events, such as Brexit and trade tensions between the US and Europe, can also impact the value of these currencies.

In terms of the impact on exports and oil prices, it is important to consider the global market conditions and the competitiveness of each country's exports. A strong currency can make exports more expensive, but a country's competitiveness also depends on other factors such as the quality of products and services, technological advancements, and trade agreements.

In conclusion, it is not accurate to say that one currency is "low" or "high" without considering the complex factors that influence its value. The current exchange rate between the Euro and the US Dollar is a result of various economic and political factors, and it is not a simple matter of one currency being artificially high or low. I would recommend further research and analysis to fully understand and address this issue.