The Dollar is taking a dive in relation to the Euro

Over the last two days the Dollar has lost recordbreaking ground in relation to the Euro.

As of just now, the USD is only worth 0.71607 Euro, and one Euro is worth 1.39651 (Source xe.com/ucc) That again is the lowest the Dolar has been since the Euro was introduced...

This is a bigger deal than it sounds, because it could very well cause an irreversible slide of the dollar if institutional investors start selling off their dollar portfolios and exchanging them with the rising Euro.

This means bigger and bigger inflation, import rates rising and a serious economic problem for the U.S. people. For starters.

If it keeps sliding at this pace, (one cent a week?) in about six months the Euro will be worth USD 2.00 or O.50 Eurocent to the Dollar.

I hope for sake of U.S. interests this will not be the case, but I for one am worried....

Well It was predicted even before the feds cut rates, but they had not choice because the housing crash and the credit cards hit will hinder the Holiday spending that is sooooo important for the retailers in this nation that is nothing but a big nation of spenders.

Our dollar is going down and it seems that will be not end to it.

What we need to check is what China and Japan are going to do with their dollar holdings, the more the dollar falls the more they will lose because after all they are the two main countries holding our debt.

So Unless they want to lose they will start selling soon that will drive the dollar even lower to a place of not return.

[edit on 19-9-2007 by marg6043]

This scares me, not because I've saved a large chunk of what I've made over the last 5 years... but because if the dollar flops it will make the people dependent on the government for their well being. If we can't afford our homes or even the basic necessities, we will turn to the government for help - and who knows what they'll make us do to earn our food and homes... What atrocities will occur once we can't afford our precious internet (thus rely on mainstream News for information)?

You know, it's really nothing new. The dollar has been depreciating for some time. But, that's not always a bad thing. It's good for our exports because it means people who use the Euro's can buy more of our stuff. But as Marg has said, the holders of our debt will not like this because of them losing money. However, if China was to get rid of the Dollar, it would also cause their economy to go down as well. China and the US are pretty much partners, and if China hurt us, it would hurt them pretty badly. As for Angry Danish, the dollar losing doesn't really hurt us here, of course it isn't good, it just means you can't get as much stuff if you went to a country that uses the Euro. And if the Euro keeps going up, say to $2USD, it would be just like the British pound, I think thats also at that price.

I can't see China getting rid of the dollar, it would cripple our economy as well as their own, so that scenario is most likely not to happen (lets hope it doesn't). Japan isn't in that good of shape either, economic wise anyways. If they get rid of their Dollars, we won't be able to buy from them which means they will lose their biggest buyer; the same goes for China.

It would be wise for them not to bite the hand that feeds...

Originally posted by ChrisJr03
If they get rid of their Dollars, we won't be able to buy from them which means they will lose their biggest buyer; the same goes for China.
It would be wise for them not to bite the hand that feeds...

I don't mean to be offensive, but are you forgetting the rest of the world? US might be the biggest single buyer, but US has approx. 302,473,000 citizens, and world has more then 6,000,000,000 people. And they're not all poor, especially considering extremely low price of Chinese goods.

USD-EUR has broken 1.40 and is close to 1.41

Maybe there is a way for those concerned with their USD savings to convert part of those savings to EUR or GBP?

Either that or buy precious metals...

I know I would....

Israel asks U.S. foreign aid be paid in EUROS

Secretary of State Rice has acknowledged a communique from Israeli foreign minister Tzipi Levni which requests that all foreign aid payments and loans from the United States be made in Euros rather than in Dollars. Foreign Minister Levni cited the rapidly declining dollar and it's disfavor as a world currency as reasons for the request.

"In the spirit of Yom Kippur, the United States will not hold Israel to any agreements obligating them to accept Dollars as payment for their foreigh aid. We will translate our obligations into Euros or whatever currency that best fits Israel's needs" Secretary RIce said in the Friday, Sept 21 announcement.

"We need to place our Israeli obligations at the top of our national prioriy list. Israel should not suffer any inconvenience due to currency fluctuations" said Rice before heading off to Camp David.

A similar request from Egypt was declined last week.

Source

I wouldn't bet this is true, the source site seems highly biased. But if it is correct - that would mean more bad omen for the US$.

The EUR-USD just hit 1.41000 at 09:23 UTC

Xe.com monitor EUR-USD

Xe.com monitor USD-EUR

For anyone with savings in the USA I would like to offer some advice to hedge against losing against a currency change...get all your savings out of the bank and buy precious metals.

No I dont work for a metals trader of any sort but its so obvious that your currency is tanking from outside your country and probably not so obvious inside.

I strongly suspect there will be a currency change in the next few years and there will be a ratio of USD to the new currency..the Amero or something like it..10:1

One Euro is now 1.42281.

It looks like the Dollar fall it is accelerating...

Not sure what to think of this, but in any case not a good think for the U.S. economy........ Does anyone know what is supposed to be critical mass here? The point where the chinese start to dump their dollar holdings? (Currency nuclear winter)

Doom?

It also means a probable increase in tourism to the US. Since the exchange rate will be favorable for their currency. The foreigners will get more bang for their buck, except for the Canadians, since it's basically 1 for 1 now. But they still like our booze and cigarettes anway.

Originally posted by bg_socalif
It also means a probable increase in tourism to the US. Since the exchange rate will be favorable for their currency.

Well in New York, you can hardly walk down the street without hearing some French or Italian or at least an English accent

It is incredibly cheap now for them here now, I've met many European people who came for just a long weekend to shop.

Originally posted by Truth4hire
One Euro is now 1.42281.

It looks like the Dollar fall it is accelerating...

Not sure what to think of this, but in any case not a good think for the U.S. economy........ Does anyone know what is supposed to be critical mass here? The point where the chinese start to dump their dollar holdings? (Currency nuclear winter)

Doom?

O look, I´m Nostradamus.

Now why did I not sell USD/EUR short when I posted this?

USD/EUR just hit 0.63 / 1.58

Amero anyone?