Once thought to be unstoppable in expanding value, the euro is on an unstoppable slide against the dollar and other world currencies. Although entirely unrelated to the strength of the US economy and real value of the US Dollar, the euro has slipped to .812 or nearly 1 USD = 1.23 Euro. A 4 year low.
This is great news for the many Americans that have sat on the sidelines waiting for that more "affordable" European vacation through nearly a decade of global uncertainty, recessions, bubble busts and a devalued dollar. Suddenly that trip to Europe doesn't seem so unthinkable, and may even be cheaper than staying at home...what? For the luxury market that held off on those many luxury European made goods whose cost soared along with the euro since 2002, good times are here again. And the poor folks in Europe who depend on the hospitality economy, suddenly their lives look rosy. Across the board everyone is happier, unless you export to Europe.
And the cause has nothing to do with "America is back", or "the strength of the dollar". It's the Iceland ash cloud that continues to cast a pall over the continent and parts of its economy, Greece's recent near bankruptcy and spotty EU deficits that plague respectable partners (Italy, Spain, Portugal etc). It's a mess over there.
And what about the Euro's future? "There is little reason to expect an end to the free fall of the euro," a team of Commerzbank analysts led by Ulrich Leuchtmann wrote in a note to clients today. "It is becoming increasingly clear that fiscal consolidation will only be obtainable at the cost of a massive recession."
Actually the euro continues its slide through May.
Good times are here again for those that like to travel to the old world.
No comments:
Post a Comment