The problem with economy, and at the same time the benefit, is that everything is linked. Like the China example showed us, it's not because it's a non-West country who falls that it doesn't affect us. So, same thing about USD/EUR. In the late 2014, USD started to get stronger while the EUR started to get weaker. While the relationship between these two events are close, I think many things happened, so many that finally, there was events making USD stronger, while in Europe things happened to make EUR weaker, at the same time. So my question here isn't only a pool but a real question needing its answers: The story is, USD/EUR is at this rate because USD is getting stronger, or EUR is weaker, or both?
Yes, the US dollar is getting stronger perhaps due to the downgrading of the Chinese Yuan. Although the Philippine peso is greatly affected - from an exchange rate of 42 to the dollar, it is now 46 to the dollar and still inching high. The Philippine economy will suffer albeit slightly but for the overseas workers, that is a great blessing since their hard earne dollars they send home will have a higher conversion to pesos. Even onliners like me who earn in dollars will benefit from that strong dollar.
I think both but maybe EUR is getting a bit more weaker than the USD escalation. This for the situation of crysis in Greece more than anything I guess.
Yes, as someone pointed out economies are all inter related. All the markets and their economies tend to influence each other. That is how forecasters get an idea how the U.S, market trading is going to go by watching how trading is going in Asia, and China in particular.
That is the point where you are right, when you earn dollar and you convert it to another money, you earn more. That, obviously, does not apply for US workers itself, more dictated by the internal market than anything. But the problem is that, I think it does not help US exportation since it costs more to buy US goods, for no strong benefit directly to the exporter. That does not feel that good to loose so many points on a market because one foreign country is doing bad. I mean, the dependence is good (I hear often that economy exchange helps to avoid wars) but the over dependence, not sure. US is not influenced if the Spain market is getting healthier, so I am not really enjoying this dependency with China government and its policy.
I personally think that it's a bit of both. The Chinese economy is getting weaker and that gives the US economy a huge boost since. On the other hand, Europe has both a social crisis and an economical crisis right now. They are dealing with the Greek debt and at the same time trying to respond as fast as they can to the immigrant crisis. hard times for Europe.
I must say I like your answer, jbepp! I find it is one of the answer that makes the most sense to me, even if I can't tell exactly if it is the truth or not, I feel it is the one of the closest to it. Why? Because Yuan is getting weaker with China's on-going crisis, meanwhile US dollar is getting stronger in a lot of countries (for example, Corzhens just above reported about Philippines' currency getting weaker compared to dollar) and EUR, well, EUR I read it was too much, way way much over-rated for years, and it was insane to maintain its rate. I also heard about Yuan getting weaker since the beginning of the year, changing the import/export relationships with US-China.
The cause of the European crisis came from the US and it's still back from the system collapse. Either cases China will be playing a bigger and bigger role and countries more and more will depend on big companies and banks.
The Euro is getting weaker because that's what the European Union wants. http://www.bloomberg.com/news/articles/2015-01-15/a-weaker-euro-europes-best-growth-hope By making European goods more competitive, both at home and abroad, a cheaper euro could help boost growth and inflation . . . a cheaper euro could be a boon for some of Europe’s largest companies, which depend on exports for much of their sales. A weaker Euro might accelerate growth in Europe or maybe it might not. But the USD has also been getting stronger and will hit its peak when the Fed hikes interest rates.
