How Low Can The Weak Euro Go?

Here’s the latest on the euro vs dollar situation. I still remember the time when the euro was quite strong and everyone was complaining about how weak the dollar was. Those days are now gone and the question we now face is this: just how far can the weak euro go?

So what do you think, is it possible for the euro to equal the dollar at some point? Given just how shaky the European economies have been (e.g. the Greek debt problem and all the European countries virtually going broke while lending money to each other), we’re now witness to this latest irony: who knew that there’d be a time when we’d recognize the U.S. as the pillar of strength among the Western economies. Who knew?

Seems like the financial crisis all over again, except it’s happening in Europe, and we’re seeing the consequences reflected in their currency. The difference between our situation in the U.S. and what’s going on in Europe is that we’re able to print more currency if push comes to shove (even at the risk of facing inflation). Unfortunately, the euro may not have the same kind of flexibility as the dollar since there are 16 European nations that are tied to the euro currency.

So check out this video that discusses the behavior of these currencies. As the video unfolds, it goes through the historical EURUSD chart, which tracks the behavior of the Euro vs Dollar, showing this index’s high at the beginning of the year. During that time, the euro was much stronger against the dollar, and that peak can be attributed to the negative economic climate we were then seeing in the U.S. with housing prices down, the concerns surrounding financial bailouts and the high unemployment rate. Isn’t it ironic that the U.S. is now recognized as the healthier economy? Not that much has changed since then, but everything is always relative, and it just so happens that the environment elsewhere is in worse shape than how things are over here, at least for now.

If you want to see more, check out the video here.

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2 thoughts on “How Low Can The Weak Euro Go?”

  1. Ahh I remember when the Euro was strong too! It is not fun predicting how low the Euro can sink. It’s hurting the whole world. The dollar is sinking too but not as much as the Euro.

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