Wednesday, March 11, 2015

Talking Dollars and Euro

Yesterday....the Euro hit .90 in relationship to the dollar.  That's the bank rate for me to buy a Euro for roughly 1.10 dollars.  It's been around ten years since we were at this level.  The general forecast for the remainder of 2015?  More of the same....meaning we ought to hit a minimum of 1.05 Euro to the dollar by late fall.

What does this mean in the world of business?  Well....Germans will be less likely to buy American products....because of the pricing.  Same for Germans going to the US for tourism.  More Americans coming to Europe this summer?  Yes.  It'll likely convince another 200,000 Americans to take the plunge and travel to Paris for the summer....that weren't thinking this way last summer.

I sat and read a business report this the end of 2016...the dollar ought to buy 1.15 Euro....maybe more. A weak Euro?  Yes, and if you were connected to Germany since the can remember the glory days of mid-summer 1985....when you could buy almost 3.5 Deutsche Marks for a dollar.  Young American GI's bought BMWs and took long trips across Germany that whole summer.

There are some banking folks who talk up the idea of large sums of money leaving Europe for the next five-to-ten years.  Where does the money go?  No idea.

To suggest that the Euro might hit 1.2 or 1.3 by 2017? sounds crazy, but it might just happen.

A GI in the mid-80's lived high off the hog.  It was a lousy salary.....I'll admit that.  But when you did up the transaction in Marks and if you used a VAT form to get sales tax removed from the were kinda shocked at pricing levels.

A return to those days?  You might look at the event unfolding as one last 'blast' before reality returns to the Euro a decade from now, and we dwindle back down to .70 to the dollar.  Take what you can get.

No comments: