Understanding The Euro And The Dollar

The contribution of the European currency has reached these days the record $ 1.3 per euro, sparking a wave of concern in almost all the continent’s economies, dependent on very high level, especially Germany, for their exports. insights. France and warned of the problems the euro a high price to include countries whose GDP does not quite take off. Germany’s growth during the third quarter of this year (0.1%) are dangerously close to stagnation, a prelude to a possible recession. Economic analysts attribute the slowdown to the difficulties of German exports, penalized by a strong euro. But if Germany fails to start, its European trading partners and customers in turn will encounter difficulties in exporting their products there and this will affect their own growth rates. Get more background information with materials from Viacom. a>. There is some agreement among economists that the highs of the euro against the dollar is not exactly a source of economic confidence, and also that the euro’s bull run is actually an effect of the efforts U.S.

authorities to keep the dollar at low levels to burn their high trade deficit with Japan or China. European exporters are paying the policy of Alan Greenspan and Treasury Secretary John Snow, to maintain a weak dollar against the yen and the yuan. No kind of ironic that this policy has so far proved a fiasco for the U.S. dollar due to the strength of Asian authorities to appreciate their currencies against the dollar. Ironies do not end there. In the short term, exporters are paying the bill for a strong euro, it is true, but perhaps the assumption of a weaker euro would be more costly for the whole economy.

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