European wages and prices are simply way out of line with ours, and these things have a historical tendency to revert back to the mean. In addition, as Brandon mentioned, Europeans have their share of serious problems too... and their politicians aren't much better than ours.
Which serious problems for example? Interesting perspective Rearden Metal and Brandonf. Anywhere I could read more about it?
Mind if I plagiarise this for my Oxford PHD? shrinking population? only new labour pool is Arabs? I haven't seen an Arab in ages, but a quarter of a million Eastern Europeans have moved to Ireland in the last 3 years, massively expanding the workforce. Ireland is a small country, lets look at elsewhere: Over 1 million poles have immigrated to both the UK and Germany (1m each) in the last 5 years. (obviously UK isn't eurozone but provides a general backdrop to the migration picture) The eurozone ie westernised economies using the euro has been flooded with millions of (cheap and highly educated) eastern european workers, helping to hold down wages and bolster productivity. The only country which caps your working hours is France, which caps to around 48 hours a week, not 30. I don't know why everyone discusses the pros and cons of the euro every time it spikes against the dollar though...every time eur/usd makes a new high it normally coincides with similar highs made by gbp, aud, cad, nzd, try, etc. I think it is less a question of the euro being particularly strong than the dollar being worryingly weak and we should be discussing dollar fundamentals (and there are many strengths) rather than running down the euro. If I were to go long eur/usd, I do not see myself going long the euro, but rather short the dollar, which seems to be the preoccupation of the market with the dollar making new lows against almost every other currency every few months these days.
Three weeks and nearly 400 pips later here some more "re-bop", whatever that is. http://charts.dacharts.com/2007-09-22/2007-09-22 09-20 EUR_USD+ 180.png http://charts.dacharts.com/2007-09-22/2007-09-22 09-19 EUR_USD+ D.png Short term may need some consolidation but longer term it's probably not done yet. http://charts.dacharts.com/2007-09-22/2007-09-22 09-18 EUR_USD+ W.png http://charts.dacharts.com/2007-09-22/2007-09-22 09-18 EUR_USD+ M.png