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  • Predictions on the Euro

    A self-serving thread....undoubtedly.

    In anticipation of my impending move to Europe (flying over on June 2) I may have to consider exchanging a number of Canadian dollars into Euros. Six months ago, the exchange rate was around 1.60 Canadian to a Euro. Today, it is 1.31 Canadian to a Euro. For those European members of ACG, what are your prognostications regarding the Euro? Has the worst of the financial problems been overcome? Will Portugal, Italy and Spain require bailouts? Will the Euro drop further or is the general feeling that it has already bottomed out? Any advice would be helpful.


  • #2
    Originally posted by skoblin View Post
    A self-serving thread....undoubtedly.

    In anticipation of my impending move to Europe (flying over on June 2) I may have to consider exchanging a number of Canadian dollars into Euros. Six months ago, the exchange rate was around 1.60 Canadian to a Euro. Today, it is 1.31 Canadian to a Euro. For those European members of ACG, what are your prognostications regarding the Euro? Has the worst of the financial problems been overcome? Will Portugal, Italy and Spain require bailouts? Will the Euro drop further or is the general feeling that it has already bottomed out? Any advice would be helpful.
    Nobody knows. It's tea-leave-reading-time re. the prognosis for the Euro area right now.

    The immediate run at the PIIGS should be over for the moment. But qui vivra verra.

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    • #3
      Originally posted by skoblin View Post
      Will Italy require bailouts?
      Why???
      A ME LE GUARDIE
      "Di noi tremò la nostra vecchia gloria. Tre secoli di fede e una vittoria". Gabriele D'Annunzio

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      • #4
        I get 2/3's of my income in $ so I've been playing the exchange game for years. Howevrer I don't claim to be an expert.

        Many European governments are getting stressed due to the recent baleout of Greece and then the add funds to support the Euro.

        I won't be surprised if it settles in the low $1.20 to the Euro. Presently it's at $1.273. If it hits $1.19 then it is in deep trouble imo. In the time your talking about, 2 Jun, I would expect it remains some where brtween $1.25 and $1.30.

        As I said, I'm no expert.
        "Ask not what your country can do for you"

        Left wing, Right Wing same bird that they are killing.

        you’re entitled to your own opinion but not your own facts.

        Comment


        • #5
          It is not over yet.

          Historically Europe lags US growth coming out of a recession. This seems to be the case again this time around for the Eurozone. Therefore the US will be in a position to start raising interest rates at the FED sooner than the European central bank will be able to do so safely without hurting output. So I would expect the dollar to continue to rise against the Euro for some time longer.

          The Germans have a long tradition of strong currency. They historically have been willing even to sacrifice output in the name of a strong currency. So, if they have the most influence over the European central bank they are likely to push for stronger Euro even if it hurts, and it would. But if they don't have that much influence I think we might see the Euro continue to fall as US recovery moves faster than the Eurozone. Even if they do have the most influence, they may not be able to stop the slip of the Euro as long as Eurozone growth does not pick up any faster compared to the US.

          All this would be the case regardless of Greece and the Pigs. Adding those troubles just accentuates the above monetary policy scenario.

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          • #6
            Originally posted by Granatiere View Post
            Why???
            Actually Spain is placed worse than Italy,Portugal too.If their economy fails,means that domino effect really exist,and Italy is next

            However Granatiere,real situation is hard to predict in Italy.Although there is a sign of improvement,some in government(without looking the opposition statements) are still insecure about what to do next,for example last week was full of pessimism

            http://www.corriere.it/economia/10_m...4f02aabe.shtml
            It is always more difficult to fight against faith than against knowledge.

            Косово је Србија!
            Never go to war with a country whose national holiday celebrates a defeat in 1389.

            Armored Brigade

            Armored Brigade Facebook page

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            • #7
              The other thing to consider is, the bail out of Greece only covers it for a Year, and if it doesn't fix its problems then this time next year it all goes wrong.

              The other issue is Greece may have sucked down all the reserves, so if any of the other countries need a bail out, there might be nowt left.
              Winnie says
              ---------------------------------
              "He fell out of a Gestapo car, over a bridge, and onto a railway line. Then was run over by the Berlin Express.

              It was an Accident."
              Herr Flick.

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              • #8
                Originally posted by Listy View Post
                The other thing to consider is, the bail out of Greece only covers it for a Year, and if it doesn't fix its problems then this time next year it all goes wrong.

                The other issue is Greece may have sucked down all the reserves, so if any of the other countries need a bail out, there might be nowt left.
                If I'm not entirely mistaken the 100 billion € or so package for Greece restructures Greece's debt for the coming three years.

                What seems slightly misunderstood at times is that it was never more than a fix of an immediate problem. The real beef is whether the Greeks will manage to turn their national finances around inside these three years. But at least now there is three years to make the attempt in. Without these guarantees the jig would be up for Greece, bankruptcy would beckon right now, and the Euro would be screwed.

                On top of the Greek guarantee there is now the EU+IMF package with guarantees up to 750 billion €. Afaik the combined bad debt of the PIIGS is estimated at 1000 billion €, so there's a fair bit of time to be bought for these countries to, like Greece, show that they can turn things around. It's also not expected to go all the way to 1000 billion €, since the plan is to head things off before the rot hits Italy, according to the logic that in order for things to go south for Italy, it will have to take the route over Spain. If it can be nipped in the bud in Spain, Italy is OK. (And if it fails, the situation is probably irredeemable anyway.)

                The hope is of course that global economy will pull out of its post-2008 slump, which is what prompted all these governments to start big deficit spendings in the first place, to ward off an immediate global recession. If economic growth starts pottering along again, even Greece will get some help with traction to pull out of its morass.

                But of course if the PIIGS don't get their houses in order in the three years the present package deals can buy, it will all be for nothing. If it otoh works, most of the pledged sum will never have to be used. (And it better not, since there are worries that at a crunch, various countries might not pay up, and it's best not have to test it.)

                Of course, we might still get to a situation where... say... the US states start going bankrupt, and the federal govt might not have the cash to bail them out, and thus the global recession everyone hopes to avoid will start, and we're all screwed... Or somesuch other thing overturning the apple cart somewhere else...

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                • #9
                  Originally posted by Miss Saigon View Post
                  It is not over yet.


                  The Germans have a long tradition of strong currency. They historically have been willing even to sacrifice output in the name of a strong currency. So, if they have the most influence over the European central bank they are likely to push for stronger Euro even if it hurts, and it would. But if they don't have that much influence I think we might see the Euro continue to fall as US recovery moves faster than the Eurozone. Even if they do have the most influence, they may not be able to stop the slip of the Euro as long as Eurozone growth does not pick up any faster compared to the US.

                  All this would be the case regardless of Greece and the Pigs. Adding those troubles just accentuates the above monetary policy scenario.
                  Maybe but I think that Germany will be rescue EURO so long so they could make. This is visible after 750 billion EURO which has ECB for rescue countries with economical problems.
                  Anyway I hope that EURO zone collapse.

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                  • #10
                    Originally posted by Camillus2 View Post
                    Maybe but I think that Germany will be rescue EURO so long so they could make. This is visible after 750 billion EURO which has ECB for rescue countries with economical problems.
                    Anyway I hope that EURO zone collapse.
                    Can you imagine the damage it would do to the standard of living in Poland? How does hello 1988 sound to you. Hoping that the Euro collapse is foolish, no very foolish. Poland isn't Germany or France. A collapse well effect Poland in unforeseeable ways. None of then positive. Other than Russia all of Poland's major trading partners are in the Euro Zone. Sorry, but hoping for a collapse from a Pole isn't just foolish it's moronic. About the same as saying you hope Poland commits suicide.
                    "Ask not what your country can do for you"

                    Left wing, Right Wing same bird that they are killing.

                    you’re entitled to your own opinion but not your own facts.

                    Comment


                    • #11
                      In other news, apparently investors have become disenchanted with the Euro as a reserve currency. So, I imagine the USD should strengthen relative to it.

                      Kind of a mixed blessing there. Might help at least exports from the Eurozone — though that might just mean bloating the German trade surplus some more.

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                      • #12
                        The surplus is only 17 billion. That seems healthy to me. Nothing extraordinary.

                        Your own country is running a trade surplus, perhaps not as high as Germanys but that doesn't hurt your economy. Rather the surpuls than some of the trade imbalance that most other European countries are running or the US.
                        "Ask not what your country can do for you"

                        Left wing, Right Wing same bird that they are killing.

                        you’re entitled to your own opinion but not your own facts.

                        Comment


                        • #13
                          Originally posted by Johan Banér View Post
                          In other news, apparently investors have become disenchanted with the Euro as a reserve currency. So, I imagine the USD should strengthen relative to it.

                          Kind of a mixed blessing there. Might help at least exports from the Eurozone — though that might just mean bloating the German trade surplus some more.
                          I know its a revolutionary idea but other countries besides germany in the eurozone are allowed to export out of it too. so when the euro falls against other currencies they too can use that. Ah.... who am i kidding?
                          Ha, wie so stolz und hehr
                          Wirft über Land und Meer
                          Weithin der deutsche Aar
                          Flammenden Blick.

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                          • #14
                            Euuuuuuh....
                            Death is nothing, but to live defeated and inglorious is to die daily.- Napoleon

                            It is better to fail in originality than to succeed in imitation.- Herman Melville

                            Aut viam inveniam aut faciam

                            BORG

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                            • #15
                              Originally posted by Stratego View Post
                              Euuuuuuh....
                              I know. Sorry. Would offer you a Bratwurst as an appology but i cant go to you guys BBQ. Perhaps next year.
                              Ha, wie so stolz und hehr
                              Wirft über Land und Meer
                              Weithin der deutsche Aar
                              Flammenden Blick.

                              Comment

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