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Is the euro likely to continue its downward slide or recover ?

  • 12-06-2010 7:14pm
    #1
    Supercell
    Registered Users, Registered Users 2 Posts: 15,489 ✭✭✭✭


    What do you reckon?
    Last November I got over 10 RMB into my hand at the ATM in China, now it would probably be about 7.5 RMB which is a pretty massive drop.

    I'm getting married in a few months over there and am wondering if I should dump some cash into my Chinese bank account now rather than suffer another big drop.

    The RMB is pretty much pegged to the US dollar and I have been reading talk of dollar/euro parity which frankly induces panic in me!

    Any one care to speculate on the euro vs the dollar/RMB over the next year or so?
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Comments

  • #2
    Time Magazine
    Registered Users, Registered Users 2 Posts: 8,452 ✭✭✭Time Magazine


    Supercell wrote: »
    Any one care to speculate on the euro vs the dollar/RMB over the next year or so?

    Unfortunately, nobody can tell you.

    Suppose I had "good reason" (as opposed to some nonsense in my head) to think there will be USD-EUR parity in six months. I will go out and buy as many dollars now as I can and will sell them in six months, making a 20% profit. But if it's really a "good reason", a lot of people will think the same as me and the laws of supply and demand will kick in until nobody thinks it's a good bet anymore.

    This has what's happened over the past couple of months, the price is currently at what people think the fair price is.

    If somebody on an internet forum tells you parity is going to happen tomorrow, ask yourself why it hasn't happened yet.


  • #3
    Hasschu
    Registered Users Posts: 411 ✭✭Hasschu


    For months now traders have been touting the Euro to become range bound around US$1.17 to the Euro. Currencies tend to fluctuate within a band and break out only when something significant happens. The something significant can be political, financial, social climate related to peaceful labour conditions, competitive goods trading and international relations as related to openness and protectionism. The $1.17 is arrived at largely on the basis of the competitiveness of the EU vs the USA based on trade balances, tourism and similar issues.
    The Euro is well respected internationally because the ECB has been very successful in keeping inflation just below 2%.


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