How you expect the US Dollar will behave in the near future against the Euro ?
Can we expect it to become in future weak as 1 euro = 1.5 dollar ?
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Tagged with: dollar • Euro • euro 1
Filed under: Currencies
Currencies trend very well. The reason they trend well is that the fundamentals of the finances of the country tend to trend and thus is reflected in the value of the currency. That is, the value of the currency reflects the financial situation of the country.
What’s changed about the U.S. economically? We are still running huge budget/trade deficits, we are about $100 trillion in debt (when you consider all gov’t, corporate and private debt), the baby boomers begin retiring in 2008 (and Soc. Sec. is extremely underfunded), we are inflating the money supply at around 11% annually, thus driving inflation. The trend for the dollar is going to be down until this is all worked out – which could be a while.
I can see the EUR/USD trading at 1.50 – 1.70 by the end of 2007. Several weeks ago, the USDX broke below a very important support level of 82. It stayed below that level except for 1 day where it got up above 82. The major support level is 80, a break below (and price staying below that level) will more than likely trigger a dollar collapse as investors make a mad rush for the exit doors. In 2000, the USDX was at 120, it’s lost more than 30% of it’s value in the last 6+ years. I don’t see that trend changing any time soon.
I’m thinking that it is going to up a bit . . . then sideways for a while, then down for a bit, then back up. Eventually it will be a little higher or a little lower compared to the Japanese Yen.
Weak, why should the trend change?
Yes.