the more I learn about it the more it seems like a huge mess. These useless bureaucrats who run the EU in Brussels who can't seem to do anything else than congratulating each other and posing for pictures are out of their mind. They' d better scrap the constitution altogether and revert plans to widen the union. The costs of integration are going to be enormous , it used to be 12 states now 25 then what . Income discrepancies between rich member states and eastern European countries are as high as 10 to 1 . And bringing these countries' infrastructure up to par with the rest of Europe is going to cost a fortune. And let's not even mention the huge cultural differences. that said I don't really understand why the euro is being battered like this, it 's here to stay no question about that. In a way EU politicians could not have dreamed of an easier way to give a boost to economic growth : a Euro on the way down instead of up
Agreed, it's strange that none of this was apparent last fall while eur was shooting up to 1.36 -- now that we're falling all the ugly sores come out. The relevant issue is whether or not having these "reasons" to sell/buy any currency actually makes a difference, or is just another way to say "Be bearish because it's going down". edit: on a side note, I wouldn't be surprised to look back a few weeks from now and see this week was the intermediate low for eur . . .
I think it's the bottom, but sentiment appears so horrible that it doesn't seem to bounce quickly, this thing is sold by trend following computer programs it's so obvious- so dumb I would say it goes up then Bam ! what happened duh we had a trend following signal - you will get whipsawed trying to catch the bottom. I think the talks of referendum to go back to old currencies are absolutely ridiculous. Actually I see Euro/Usd back to the 1.35 -1.40 area maybe as high as 1.45 within a year or so. However over the 2-3 years horizon I believe the dollar bottoming process has started but there will probably be gigantic swings on a monthly basis .
--- coudnt resist to register just to answer this "post"... well,lets see : 1. "it used to be 12 states now 25" - yea,used to be...sometimes ago the US also used to be so and so much states,i used to drive GM made cars only but now i drive a japanese and the EU started with 6 countries...basically the social/economic evolution of Europe obviously hasnt stopped. 2."Income discrepancies between rich member states " - ...this comes from a person who is a poster on the ET forums... LOL,are you a communist in disguise or what? who cares about income discrepancies and why should it really matter to the euro economy ? does it matter in the US ? arent there big Income discrepancies between people,states,cities in America ? - besides in poorer countries of the EU there are also big differences between rich and poor,between rural areas and the big cities...etc 3."And bringing these countries' infrastructure up to par " - ...guess what ? investments...guess what...profits from investments in infrastructure.example,parts of a project has been started on connecting middle europe(austria,slovakia) to Greece-couple of big bridges over the Danube,couple of intersections of new highways etc.job creation,return on investments and so on is to be expected...Danish airport operator just got 2 airports in the "New Europe",austrian and german electrical utilities/companies are building hydros all over "New Europe" where the terrain allows this of course,kindda like saying building the railways in the US 150 years ago was a bad thing...never seen in human history ever since the old romans started building the first roads in Europe where it turned out that building infrastructure turned out to be a bad idea...you maybe? 4."is going to cost a fortune" - money begets money,as a poster here youre supposed to know it,what else to do with money huh? just let money to work... 5."And let's not even mention the huge cultural differences" - LOL ...thats my fav...we still talking about the EU here right? ...so lets see the cultural differences : Historical - the Baltic countries have been part of Germany for hundreds of years,also the population of Estonia is related to Finnland(same origin) . Then we have the Czech Republic where part of it has been german the other(bigger) part austrian for many many centuries until the WW1. Poland - part of it german,the southern part austrian. Slovenia - ,mostly controlled by the austrian empire,in today's southern most Austrian province(Korinthia or Kärnten in german) a third of the population is of slovene origin...there was a referendum after the war if to join Austria and so on,then in the italian city of Triest a big part of the population are also slovene since it lies on the border,actually italians joke that Triest is not Italy. Cyprus - well...no need to go into detail here a former british territory Malta - same goes for Malta - former british territory which was granted independence only couple decades ago with very strong influence of Italy over the centuries. Hungary - well...the Austro-Hungarian Empire was the strongest and richest country of middle Europe for many centuries,as the name suggests Hungary was a part of it...the Empire is also called the double eagle,where Hungary is the one eagle-Austria the other,the double crown Empire because the Emperor was crowned once as a king of Austria once as a king of Hungary...etc Slovakia - never been a country before,has been part of the Austro-Hungarian empire,also see the Czech Republic. ...Now what else comes as a culture to mind ...well,lets begin very very early -where did the very very first protestants appear in Europe- ever heard of a Czech called Jan Hus...long long before Marthin Luther... -ever heard about Mikolaj Kopernik or better known as Nicolaus Copernicus ,Born: 19 Feb 1473 in Torun, Poland-if that is not culture then i dont know what is. -Kafka...Sigmund Freud...Elias Kanetti - isnt all this culture huh ? does a german like good beer-hell yes,does a Czech/Slovak likes a good beer - even more so,doesnt polish people enjoy driving a nice german car,enjoying the next big Hollywood movie,TV series from Britain and Spain,vacation on the Costa del Sol,skying in the Alps(ever been in the austrian alps?a 1/3 of the visitors are from Czech/Slovak/Hungary) ever visited a theatre in Prag ?...different culture hmmmm...im scratching my had --- if you want to talk about different culture then please talk about the USA and Iran,or Pakistan or Bangladesh . ---- now to the more important idea of your post : since right now there are negotiations going on about the EU budget you seem to think there is a mess....but guess what ? the EU has a finite amout of money to distribute between the members,unlike the US the europeans seem to be too stupid not to want to finance themselves by debt. So when you have a finite amount of money,a certain sum that cant be "ballooned" or "bubled" by the ECB,then everyone will be looking to get the most for himself,to get the best conditions,to receive what a member thinks that he needs/wants/deserves etc. Yes,this is not US style of budget making where Bush suggests 60 billion more for the bottomless moneyhole called Iraq and congress votes it into effect immidiately with 400 to 1 yes. --- i think you watch too much CNN. --- cheers
Well, an 11% trending move in 3 months is certainly a welcome trading opportunity! Just because the french didn't ratify doesn't mean that this whole process is out. Some tweaks, and 2 years or so, and it could all go through. However, EUR/USD at 1.20 does look a heck of a lot better for getting out of USD and into european assets for diversification's sake than 1.35 did! And, to boot, you might even be willing to take that european vacation now (at only a 20% premium). This intermediate retracement should last 6-9 months before the euro starts its slow upward climb again. Bottom? 1.15 for guesses. I don't think we see 1.10 again. And hey! That coincides with the Fed's rise in rates to 4.25, where they are expected to stop. Lastly, is it just me, or is every currency trying to DEPRECIATE itself these days? Makes no sense.
first poster, I feel honored your argumentation is interesting and I admit to knowing little about the EU and to not even being interested in the intricacies of EU politics despite being a EU citizen myself - I am glad I no longer reside within its borders though. But I am afraid the cultural cohesion you see in the light of history is not shared by most people , that's probably the main reason for the noes in France and the Netherlands. How can you integrate countries where the average monthly income is less than EUR 3000 when the average in the EU is 26K ? Your comparison with the US is dubious. No country, civilisation has developed such a powerful uniting culture and sense of belonging as America. In America most everybody feel , dress and live the American way whether they were born there or not. This is not the case at all in Europe, foreigners do not assimilate until one or two generations have passed. And tell me what the British or the Dutch have to share with the Turks or the Slovenian ? If one really wanted to build the so called United States of Europe, start by making English the official (or the second )language in schools and public administrations, then we will be talking about cultural cohesion in 20 years maybe... what do you think the French will say to that ?
Just wanted to point out that an average monthly income of 3000 Euros, is 36,000euros a year, so it seems that countries that have average monthly incomes of less than 3000 euros would fit pretty well into an integrated europe. I am assuming that you meant that 26k was the average yearly income in the EU.
are you talking about the Eastern European countries that already joined the EU? is so, then that statistic is completely wrong. might be true for romania, bulgaria and ukraine and so on...
I dont undertand why always europeans have to compare themself with US.. the EU is not more than an imperialistic dream to france and germany, the rest of the members seem to be "useless" for those two countries They feel that they have a good chance to rule the world with US and China (in future) Chirac think that more is better, and a I think he's lost thinking that way.. The true is that socialism (in any of its form) have ever work and it never will.. too succed you have to be pragmatic and productive and have flexbilty... that''s why they made such a mess with the constitution. I used to live 2 years in spain and italy and spend 4 years in latinamerica and everytime a spent time(seasons) out of US the more I admire the US funding fathers anyway, My brother used to work as airplane Engineer making 29k a year un barcelona for 5 years came back to the state got a job with delta and is making 67k a year (w overtime) plus all the standart benefits... salaries in europe sucks, a lot of Bureaucracy people are getting older and older and the young's one have to pay huge taxes for those Retiree and lazy peoples...