How does the Euro affect the US dollar and its markets?
In recent weeks, the Euro has significantly dropped, causing our markets here in the US to fluctuate. Why is that?
The Euro is the main competitor of the US dollar. The weakness of the Euro will cause the dollar more stronger. Both currencies are closely related in the financial markets.
June 18th, 2010 at 6:01 pm
The Euro is the main competitor of the US dollar. The weakness of the Euro will cause the dollar more stronger. Both currencies are closely related in the financial markets.
References :
June 18th, 2010 at 6:34 pm
Read a book on banking and money or a book on currency trading and monetary history. It can become a very complicated problem with many variables coming into play. Believe me, or ask George Soros or Ben Bernanke.
References :
M.A. Economics 1968
June 18th, 2010 at 7:15 pm
1) Exports are seen as a way to uplift economic growth in the US this year.
2) A weaker Euro makes U.S. made goods more expensive in Europe, and can cut into profits of U.S. corporations doing business in the 15 nations the share the Euro.
3) If American corporations have smaller profits they may put off hiring more permanent employees. This would mean that the unemployment rate could stay the same, or get higher, and if that does consumers may reign in on spending even more. This is bad because consumer spending accounts for 70% of economic activity in this country.
So all in all, the markets are falling because of fears that a weaker Euro will hinder U.S. economic growth this year. It’s all connected and sorry it took that much to explain it.
References :
July 6th, 2010 at 2:59 pm
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