How is the Euro Stronger Than the Dollar?

For all the massive criticism of European socialist programs and liberal spending policies, how is it that the Euro has continued to increase in value against the dollar (or vice versa)? Shouldn't the Euro (not to mention the loony) be devaluing as well? Instead, it is being looked upon by many nations around the world as the most stable currency that financial markets should be pegged against.

Comparatively, America is far less socialist than most European nations, yet our currency continues to slide to levels we haven't seen since "stagflation" or even the Great Depression.

Are the socialists winning?

No... It's called "something other than the dollar".

Right now, the US leadership has both bumbled foreign relations enough that investors couldn't care.

The euro is traded heavily. The loony, not so much.

Within the banking world, many nations and corporations hold strong euro positions. The major currencies being US dollar, Yen and the Euro.

When once we had to move some amny different currencies now it is more often just the euro. Less conversion all around.

Neither of your "answers" actually answer any questions. Why is the Euro continuing to gain in value? How is a "socialist" currency getting stronger and stronger? Why is the dollar getting weaker and weaker?

Because of the antics of the President on the global stage...

Well part of the USD decline is LESS PEOPLE USING IT OUTSIDE OF AMERICA.

I work in International Loans. Every year there has been an increase in Euro loans. These are corporations taking these loans. All the corporations that had a strong Euro position are making out on its increasing value.

B/c we have a populist as POTUS?

It has nothing to do with socialism or anything else, but with perception of stability. Right now, the American economic system is not perceived as being very stable, and it probably isn't. There is too much hesitation between what the Republicans want to do and what the Democrats want to do. In Europe, though the economies have serious problems (major strikes, high unemployment, serious political instability in Belgium...), there is little question that things will change one way or the other. The euro is simply looked at as an alternative, since there is no other currency besides the US dollar that has any claim to serious international power.

The euro is strong right now, but that does not mean it always has been or always will be. When it was set up, it was set at a value that was quite a bit higher than the dollar. It slid for quite a while, though, until the dollar was actually quite a bit higher than the euro. Now, it has slid the other way, but is still only about as far from the initial point as it was when it was at its strongest. IOW, the variation is not really any greater than it has been in the past, it just happens to be at the other end of the cycle.

Note that the Swiss economy is much stronger than the economies of Europe, but the Swiss franc is sliding just about as much as the dollar right now. It really has relatively little to do with economics. Those who brag about how strong their currency is are really just engaging in typical chest-thumping. It is in a country's interest for its currency to be moderately weak. Too weak and they won't get any credit, but too strong and their products cost too much on the international market.

Believe me, the European economists are not cheering about the level of the euro right now. It is helping the American economy and hurting them.

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You know, I'm surprised the libertarians around here haven't been all over this like a rash: to all intents and purposes the country has had no government for what, about five months? And people are still going about their everyday lives...

The Euro isn't gaining so much as the dollar is losing.

The problem is that the Congress and the Federal Reserve, by their debt spending and money printing respectively, are reducing the value of the dollar. And the one way in which the euro is better than the dollar is that it is a true intl currency, not tied to the fortunes of a single nation.

Not so sure about that, from what I can see the Euro is also gaining against the HK dollar and the Yen, which are pretty stable against the US dollar. That would imply genuine strengthening for the Euro.
Oddly enough, Sterling is one of the few currencies holding its position with regards to the Euro, which means either that financiers are ignoring our looming credit crunch or, irony of irony, we're protected by our perceived closeness to the Euro...

Disolve the National Government, place the territory directly under the E.U. and rename it 'Schuman, D.E.'

Umm, I haven't seen the weakening dollar helping us at all. Yeah, the theory is that a weaker dollar makes our goods more attractive in foreign nations, but since our manufacturing base has been eviscerated by free (not fair) trade agreements, what goods do we have for other nations to buy?

Yes, the stronger Euro will hurt European exports as well, but they are still in a far better position than we are, as our devaluing currency is making foreign investors pull out of American markets and investing in stronger, more stable markets. So I disagree with your assertion than it is helping our economy.

I sure as hell can't think of any.

Coca-Cola, Microsoft Windows, Cisco routers, Hollywood flicks, Harley-Davidson bikes, gene modified seeds, various jet fighters...

Porn.

Ahh yes, and the booming stock market reflects how these goods are just flying off the shelves in other nations...oh wait...

Because it's the only viable competitor to the American Dollar which is being floated on a shaky "spend like crazy" economy.

Europe's economy is seen as stable, but just remember where that of the major EU members, only the Pound Sterling was equal or above the US Dollar.

It's all balance anyway. Shit goes up and down, like a wave in the ocean.

Well, I had a lengthy post until this board ate it.

For fuck's sake, fix the boards!

Say what?

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Aaah.

Because we keep printing more money.

And will someone please explain to me why the stock market being at 14,000 is related to the value of the dollar? Or even a good thing at all?

There are no socialist countries in Europe. They're all capitalist countries, even France. Although many have larger, more pervasive welfare states, levy higher taxes, and/or regulate business in more detail than the U.S., the vast majority of their goods and services are produced for profit and are allocated by a mostly free market.

*Deleted - point already made in the thread*

Edited.

14K? It's below 13K now and going down faster than a five dollar streetwalker in Norfolk during Fleet Week.

Oh, good. I haven't been paying attention ever since it started going up liek crazy.

Well, there are lots of factors, but mostly, since interest rates are so low here, American investments look less favorable, so people will invest their money where they'll get a higher return. As a result, the demand for the dollar is lower. Just like goods, when the demand for a currency drops, so does the price (relative to other currencies).

The fed could raise interest rates, and that would cause the value of the dollar to go up, but the credit crunch is already slowing down the economy. If we raise interest rates, it will be even harder for companies that want to expand to get the money that they need to do so, so the fear is that raising interest rates will put us into a recession.