Euro outlook in 2013

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This topic contains 23 replies, has 8 voices, and was last updated by Profile photo of Anonymous Anonymous 3 years, 11 months ago.

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  • #57188
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    A very interesting article, that will surely be of interest to anyone wanting to convert into Euros or the reverse.

    http://www.piie.com/blogs/realtime/?p=3235

    Despite the numerous predictions of its demise, the euro is alive and well at the end of 2012. Indeed, it has again held its value against other currencies during the year,1 confounding skeptics just as it did a year ago. As 2012 comes to a close and the last European Union Council of the year has ended—there have been seven in 2012!—it is time to take stock. As someone who ended 2011 on a positive note for the euro, I am happy to report that the outlook remains positive for 2013.

  • #114169
    Profile photo of Anonymous
    Anonymous
    Participant

    The Euro is a strong currency because it is effectively the deutschmark, the German currency and because the European Bank in Frankfurt have not embarked on Quantitative Easing which would have weakened the currency and resulted in higher inflation. The Euro will get even stronger when countries like greece and spain and italy and portugal eventually leave the Euro.

    The Pound Sterling is a rubbish currency and is being trashed by the Bank of England by the funding for lending and QE in much the same way that the Dollar is being trashed by the Federal Reserve by the QE and money printing they are doing. This means thata Sterling and the Dollar will get weaker as inflation in these economies rises as more money enters the system causing Sterling and the Dollar to be debased in value.

  • #114172
    Profile photo of Anonymous
    Anonymous
    Participant

    I agree with jakesuper on this. The problem is that I don’t see how the politicians will cope with it though there are no easy ways out of this financial turmoil. All they want to do is win elections and you don’t often succeed with that by doing what’s right. Had it not been for Germany and a few other smaller nation the euro would allready have lost 30-50% of it’s value.

  • #114176
    Profile photo of katy
    katy
    Spectator

    When Eurozone was booming the rate to the dollar was almost parity…doesn’t that tell you anything 🙄 The last thing the club med countries need is a strong euro!

  • #114181
    Profile photo of Anonymous
    Anonymous
    Participant

    The last thing any Eurozone country and the rest of the EU need is a strong Euro. Our internal trade is falling and we are hoping to export our goods and services to the emerging east, or more accurately the rest of the world.

    We need Mervyn King at the head of the ECB, he is an expert at holding down a currency.

    It won’t happen and I expect the Euro to get much stronger next year, bad news for me personally and a disaster for the EU. The fiscal cliff in the US won’t help us, it will make the Euro even stronger than it already is.

    Didn’t it start at something like 88 Centimos to the Dollar? Brussels were aiming for parity, but they were wrong.

  • #114183
    Profile photo of Anonymous
    Anonymous
    Participant

    katy not really the dollar is going to become a useless currency in a few years if they continue doing what they do. They are printing money like there is no tomorrow. Americans can now see that their employment figures look slightly better but they can’t see that they have become much poorer. To devalue a currency does nothing good in the long run. What needs to be done for Greece and the others is to become more efficient nations and not to be able to devalue their currency and make their population poor.

  • #114185
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    Anonymous
    Participant

    @mgspain wrote:

    @Rocker wrote:

    It won’t happen and I expect the Euro to get much stronger next year, bad news for me personally and a disaster for the EU.
    .

    Is it not possible to transfer your GBP assets to Euros ASAP? I do it all the time and vice versa depending on where I see things are going.

    I’ve tried it in the past and came badly unstuck when I bet on the pound Sterling rising against the Euro at the wrong time, around two years ago.

    I’ve taken the middle course now, half and half, and safe, I hope.

  • #114188
    Profile photo of Anonymous
    Anonymous
    Participant

    the way i see it the pound to euro rate was at parity then we have devalued the pound by quantitative easing and yet the pound is now stronger against the euro at around 1.20 to the pound how can that be seen as a strong euro.Please someone explain it to me as i don’t see it.

  • #114189
    Profile photo of Anonymous
    Anonymous
    Participant

    When the Euro was introduced, a pound Sterling was worth 1.70 Euros, a ridiculous rate for UK’s exports to the rest of the EU, where 60% of our exports go.

    The BoE did everything in its power to reduce the currency, including masses of QE. Around six years ago they managed parity with the Euro, great for our exports, but the markets saw it as an unreal valuation. It seems to have settled at around 1.20 now, but currency markets are fickle and if another Soros came along anything could happen.

    Or China could devalue the Yuan and the Dollar could fall off the fiscal cliff.

    I’m happy with 1.20 but doubt whether I’ll be consulted before the next change comes along.

  • #114191
    Profile photo of Anonymous
    Anonymous
    Participant

    We are getting into a subject that is impossible to conclude due to its complex nature and a ever changing world.

    The rate of €1.70 ??. I do remember using €1.67. The rate at that point reflected the uncertinity of a new currency & the settling down period of this currency. The currency had a mix of countries/ecomonies with there respective strength & weekness. We had moved on from then and as the drama is unfolds infront of our eyes.

    As USA & UK’s printing presses are working flat out. The market find’s relatively stable situation with € ( thanks to German ) and with the Swiss frank.

  • #114193
    Profile photo of Anonymous
    Anonymous
    Participant

    @Rocker wrote:

    When the Euro was introduced, a pound Sterling was worth 1.70 Euros, a ridiculous rate for UK’s exports to the rest of the EU, where 60% of our exports go.

    The BoE did everything in its power to reduce the currency, including masses of QE. Around six years ago they managed parity with the Euro, great for our exports, but the markets saw it as an unreal valuation. It seems to have settled at around 1.20 now, but currency markets are fickle and if another Soros came along anything could happen.

    Or China could devalue the Yuan and the Dollar could fall off the fiscal cliff.

    I’m happy with 1.20 but doubt whether I’ll be consulted before the next change comes along.

    so what your saying is we have massively devalued the pound on more than one occasion by printing money and because the pound is weak it keeps gaining value against a strong euro no wonder i am confused

  • #114194
    Profile photo of katy
    katy
    Spectator

    The EU is doing it’s own brand of QE, has been doing for some years. Firstly buying up bonds secretly and now various crackpot schemes. At least the USA managed to obtaind 3%growth.

  • #114195
    Profile photo of Anonymous
    Anonymous
    Participant

    Currency valuations are often very complex due to the nature of the worlds financial system but two of the biggest factors except normal trade is the amount of that currency in circulation and the ability of it’s “owner” to handle political turmoil. In the last sense the UK is deemed by the markets to be more easily judged at the moment.

    The dollar for example is only holding together by it’s status as a reserve currency and the US ability wage wars and preassure other nations into trading for example natural resources for example guns and rebuilding projects by supporting a certain side in a conflict. Before supporting a certain side they have allready assured from that partner that they will be the once holding the contracts when the chaos is over. Very synical but effective. This will ofcourse bite them in the ass from time to time but since they proclaim to be the defenders of freedom all over the globe they get away with it.

  • #114196
    Profile photo of katy
    katy
    Spectator

    Go to most places in the world and the dollar is freely accepted..including the far East, Africa and the whole of south America. Says it all really 😀

  • #114197
    Profile photo of Anonymous
    Anonymous
    Participant

    @katy, I agree with you so the common denominator is quantative easing no matter how you package it. The market obviously read’s it in a manner it seem’s fit. I am no expert on it, in this case do we deduce that if it was not for the Q/E carried out by the ECB the £ will be at par with € ?

  • #114198
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    Anonymous
    Participant

    I think at some stage the core countries of the Eurozone hoped that the Euro would eventually take over from the mighty Dollar as the reserve currency. It couldn’t work because of the internal lack of unity, it would have needed a United States of Europe to reach that goal. Few people in Europe like the term and there is some embedded anti-American feeling across Europe.

    And as Ardun mentioned, the US is where it is because it is the biggest military power in the world, and it hasn’t always used that power wisely.

    A common European currency must make sense, economically at least. How can anyone complain of European countries pooling their money to help out the strugglers when needed? Who would have benefitted if Greece, Ireland and Portugal went bankrupt.

    If it were possible to separate finance from politics, all countries in the EU would be in the Eurozone, but you can’t.

  • #114199
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    Anonymous
    Participant

    A common currency in europe or for that matter the world without political influence would be ideal as you say Rocker. Only a countrys ability to be efficient would mean that it would prosper.

  • #114201
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    Americans can now see that their employment figures look slightly better but they can’t see that they have become much poorer. To devalue a currency does nothing good in the long run.

    No, we’ve seen improvement in employment, stability in the workforce and property values are increasing – as much as 25% in some markets. [source: http://www.sfgate.com/realestate/article/Bay-Area-home-sales-prices-jump-4116852.php]

    But my issue with your posts about this topic are this: In times of crisis, ALL reasonable countries can devalue their currencies/’print money’ as a response. It is good in the long run that the countries continue to exist and that people’s suffering is minimized. Given the stranglehold that the nutcase Tea Bag Republicans have in our House of Representatives, there are few other remedies available.

    The analogy that comes to mind is that if you have an automobile with a bad battery that is dead, it is OK to jump-start it with cables connected to another vehicle to get to work. And it is OK to jump-start it again after work to get to the auto parts store to purchase a new battery. But in the world of libertarians who have an unrealistic ideology that demands that there is no public debt, because the battery is dead, the vehicle must be abandoned.

    Say what you will about the US, there’s plenty to criticize. But ‘printing money’ as a response to a crisis isn’t apocalyptic as you make it out to be.

  • #114202
    Profile photo of Anonymous
    Anonymous
    Participant

    Gary we will see who was right in a few years time. I admire lots about the US it’s some of your leaders that are the problem. I lived in Texas as a young one and liked lots of it.

    Your car battery analogy would be better if you added that you drained your neighbours batteries to start your power guzzling SUV. Sure it will start the car but you made your unsuspecting neighbours have to deal with your problem. At the same time you didn’t replace your coal which was the real problem in the battery which will make it not recharge

    Devaluation just leads to the effect that all other countries needs to devalue and moves the costs over to the poor people with savings and locked up incomes. The rich people are never hurt by the effects of inflation.

  • #114203
    Profile photo of Anonymous
    Anonymous
    Participant

    Many Countries would like to switch to non $. The economic threat by USA & no doubt followed by arm invasion with the pretext of economic terrorism will to follow.

    All comodities are traded in US $ the affect of this with the depreciation of the $ has & is creating havoc on their balance sheet.

  • #114204
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    Many Countries would like to switch to non $. The economic threat by USA & no doubt followed by arm invasion with the pretext of economic terrorism will to follow.

    All comodities are traded in US $ the affect of this with the depreciation of the $ has & is creating havoc on their balance sheet.

    The dollar exists for the US economy. That other countries choose to use it in some capacity has been good for the dollar, but by doing so, those countries assume the risks associated with ‘dollar politics’ and policies in the US. Before the ‘crisis’, the euro was seen as an alternative to the dollar, especially for OPEC members. But no currency is perfect and few have provided the stability – however weak it may be – of the US dollar.

    There’s one other characteristic in the US that I’m sure ardun has noticed: Things move very quickly. Our economic system is dynamic and synergistic. There are both good and bad aspects to this, but it usually softens the impact of economic crises. We have sufficient economic diversity that allows our technology sector to take a hit, all the while our ‘entertainment’ industry experiences dramatic growth. Agribusinesses may have a bad year but that same year aerospace industry soars.

    I actually believe that the concept of a stable, sustainable economy in the US is a myth. I think we should plan for going from ‘bubble’ to ‘bubble’ forever, and have adequate plans for when each bubble pops.

  • #114205
    Profile photo of Anonymous
    Anonymous
    Participant

    @garysfbcn wrote:

    Many Countries would like to switch to non $. The economic threat by USA & no doubt followed by arm invasion with the pretext of economic terrorism will to follow.

    All comodities are traded in US $ the affect of this with the depreciation of the $ has & is creating havoc on their balance sheet.

    The dollar exists for the US economy. That other countries choose to use it in some capacity has been good for the dollar, but by doing so, those countries assume the risks associated with ‘dollar politics’ and policies in the US. Before the ‘crisis’, the euro was seen as an alternative to the dollar, especially for OPEC members. But no currency is perfect and few have provided the stability – however weak it may be – of the US dollar.

    There’s one other characteristic in the US that I’m sure ardun has noticed: Things move very quickly. Our economic system is dynamic and synergistic. There are both good and bad aspects to this, but it usually softens the impact of economic crises. We have sufficient economic diversity that allows our technology sector to take a hit, all the while our ‘entertainment’ industry experiences dramatic growth. Agribusinesses may have a bad year but that same year aerospace industry soars.

    I actually believe that the concept of a stable, sustainable economy in the US is a myth. I think we should plan for going from ‘bubble’ to ‘bubble’ forever, and have adequate plans for when each bubble pops.

    The planning for bubbles is a must since it’s built into a FIAT-currency system with the way debt is created. The lending institute needs exponential growth to survive and therefor the booms and busts of our days. They will even come more rapidly for every cycle that occurs.

    It’s not a good system since it doesn’t reward hard work and efficient production but rather it’s more of a hazard game for most of the populace.

  • #114206
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    Anonymous
    Participant

    An accurate assessment of the US, Gary. The main point is that it’s a big and diverse country, with a large population (workforce). And it’s united.

    Europe could compete if it was united, but such a unity is an impossibility, even the lack of a common language sees to that.

    And, as you point out, being united the US can respond quickly to emergencies, whereas European wheels grind exceedingly slowly, often having to rely on referendums in individual countries.

    And, internally, the US has only fought two wars, one against the British and one among themselves; I wouldn’t like to count the wars within Europe during the same time span – if you dig deep enough anywhere in Europe you will find forgotten mass graves. Spain is full of them.

  • #114207
    Profile photo of Anonymous
    Anonymous
    Participant

    @Rocker wrote:

    An accurate assessment of the US, Gary. The main point is that it’s a big and diverse country, with a large population (workforce). And it’s united.

    Europe could compete if it was united, but such a unity is an impossibility, even the lack of a common language sees to that.

    And, as you point out, being united the US can respond quickly to emergencies, whereas European wheels grind exceedingly slowly, often having to rely on referendums in individual countries.

    And, internally, the US has only fought two wars, one against the British and one among themselves; I wouldn’t like to count the wars within Europe during the same time span – if you dig deep enough anywhere in Europe you will find forgotten mass graves. Spain is full of them.

    *Edit sorry my wrong of missreading what you wrote.

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