Jump to content
House Price Crash Forum
Sign in to follow this  
RUSARTNET

What Is Holding Up Eur Exchange Rate?

Recommended Posts

What I cannot quite understand is that why the other central banks (US, UK, Japan in particular) are printing money as if it is going out of fashion, the EU is not doing so quite to the same extent. Also, Germany would never allow it - obviously it wants its currency to be cheap, as it is an exporter, but they have an historical fear of inflation because of their experience in the 1920s. Can anyone tell me what the EU is doing to make the Euro more or less hold up against the other currencies (of course, it is relatively strong right now against the yen and dollar)?

Share this post


Link to post
Share on other sites

My view is that the Euro currency has the large number of users 320 million source, the usa has 313 million population and the UK 65 million.

The strength of a currency is based on what exactly? Faith?

the number of tax payers and the total GDP of the currency area certainly helps keep is steady.

IMO the pound is worth 80c to parity with the Euro, why would it be worth more? The banks are based from London and manipulate it up/down as they see fit. Actually the only thing propping up the pound is London/The banksters, perhaps you should be happy the parasites are still alive.

The Euro

There is an awful lot of 'The Euro' caused the European crisis, but when you look behing the curtain you find that it was:

1) the banks being reckless

2) governments overspending (humans will be greedy)

3) people overspending (humans will be greedy)

4) Lack of regulation

For example here in Ireland it would have been so easy to cap LTV and wage multiples back in around 98, ten they would have avoided all the mess.

The euro has little to do with it. For example, if Greece had it's own currency and overspent and the markets lost faith their currency would have collapsed and they would still have major issues today.

Share this post


Link to post
Share on other sites

What I cannot quite understand is that why the other central banks (US, UK, Japan in particular) are printing money as if it is going out of fashion, the EU is not doing so quite to the same extent. Also, Germany would never allow it - obviously it wants its currency to be cheap, as it is an exporter, but they have an historical fear of inflation because of their experience in the 1920s. Can anyone tell me what the EU is doing to make the Euro more or less hold up against the other currencies (of course, it is relatively strong right now against the yen and dollar)?

LRTO (long term refinancing operations) is the ecb`s way of financing their banks it`s like the FFLS in the UK from what I can make out

I have no proof but would be very surprised if none of the FFLS money taken up by the banks found it way into the bond markets

Strenght of the euro ? best looking horse in the glue factory?

Share this post


Link to post
Share on other sites

Strength of the euro ? best looking horse in the glue factory?

Exactly, they are all fiat currencies. Government have no control (it's human nature), and collective responsability so the value of currencies will always tend towards zero.

The interesting thing is what happens if they all tend towards zero at the same time? they are all effectively staying still.

Share this post


Link to post
Share on other sites

LRTO (long term refinancing operations) is the ecb`s way of financing their banks it`s like the FFLS in the UK from what I can make out

I have no proof but would be very surprised if none of the FFLS money taken up by the banks found it way into the bond markets

Strenght of the euro ? best looking horse in the glue factory?

The ECB allowed the early repayment of LTRO and MRO (short-term) loans from the start of 2013 which has seen excess euro reserves decline sharply, meanwhile dollar and yen reserves have exploded. This is what's supporting the euro. Some are now arguing that monetary tightening has gone too far and that Draghi needs to do more LTRO to generate EZ growth.

MRO+LTRO.PNG

Share this post


Link to post
Share on other sites

What I cannot quite understand is that why the other central banks (US, UK, Japan in particular) are printing money as if it is going out of fashion, the EU is not doing so quite to the same extent. Also, Germany would never allow it - obviously it wants its currency to be cheap, as it is an exporter, but they have an historical fear of inflation because of their experience in the 1920s.

Germany already has a beneficial exchange rate because of the Euro. Without the Euro Germany would find exporting far more difficult.

Share this post


Link to post
Share on other sites

The reason I ask is because I am in the Eurozone right now, do not keep my savings in Euro at the moment, but plan to do so, hopefully in able to just leave them in Euro and forget about it. But it seems that every central bank takes it in turn to announce some form of easing or currency control/manipulation (USA, UK, Swiss, Japan), making it look as if it would be the turn of the ECB next.... so I do not want to move into Euro and immediately see it go down too against the other currencies. Also, when there is a financial crisis, there is a tendency to flee the Euro and also drive it down (personally, I do not think there will be a crisis soon, I think central banks will think up more and more devious ways to paper over the cracks, like a desperate clerk who has stolen from the till and needs to cook the books).

Share this post


Link to post
Share on other sites

If it's of any interest, we moved out money to the Euro last year, luckily we managed to get 1.23 around the time of the Olympics bubble. I honestly believe that the bankers had manipulated the pound exchange rate as they knew lots of people would want pounds for the Olympics.

anyways, I am looking to move some funds back to the UK, my target is 1.16 GBP/EUR, was getting a little worried that the growth propaganda was managing to work, but the last couple of days it seems to be wearing off.

Long term (5 years) I am confident of 1GBP=1EUR, so to that effect it may be worth transferring out og GBP now. Currency Fair are good btw.

Share this post


Link to post
Share on other sites

Actually, it is complicated, most of my cash is in Japanese yen right now, because of foreign earnings. I do not live in the UK. In the past, I have been happy to stay in yen, but I think the Japanese central bank is prepared to commit senseless hari-kari with their currency. The yen has already dropped much in relation to the euro over the past 9 months - and I think it may drop even more. I am just not sure what the Germans think of this policy, though, and what EUR/JPY exchange rate they are happy with...

Share this post


Link to post
Share on other sites

There is an awful lot of 'The Euro' caused the European crisis, but when you look behing the curtain you find that it was:

1) the banks being reckless

2) governments overspending (humans will be greedy)

3) people overspending (humans will be greedy)

4) Lack of regulation

The intoduction of the Euro resulted in the interest rates falling and the credit givers and takers misassessing the risks, and the usual checks and restraints of the market capatalism disappeared. It certainly exacerbated all the issues that already existed, and it has prevented a simple solution (devaluation and default).

Share this post


Link to post
Share on other sites

Germany already has a beneficial exchange rate because of the Euro. Without the Euro Germany would find exporting far more difficult.

Yes, the exchange rate (and interest rates) for Germany is too low, which means that industry is booming and there is a raging housing bubble. If you really think that is a benefit, you probably shouldn't be reading this forum.

There is no such thing as "benefitting from a lower exchange rate".There are only "good policies" and "bad policies". In the medium term, there will be consequences to pay. The euro has been a disaster for Germany since inception. I would say the only major country that has benefitted from it is France, simply because France is an economicly "average" and so corresponded to the euro policies.

Share this post


Link to post
Share on other sites

Actually, it is complicated, most of my cash is in Japanese yen right now, because of foreign earnings. I do not live in the UK. In the past, I have been happy to stay in yen, but I think the Japanese central bank is prepared to commit senseless hari-kari with their currency. The yen has already dropped much in relation to the euro over the past 9 months - and I think it may drop even more. I am just not sure what the Germans think of this policy, though, and what EUR/JPY exchange rate they are happy with...

What about the Swissy? Rock-solid economy, persistent slight deflation, govt debt under control.

Share this post


Link to post
Share on other sites

What about the Swissy? Rock-solid economy, persistent slight deflation, govt debt under control.

Yes, you are right - I used to be in CHF a while ago, it always nicely appreciated against the euro as well, until they almost reached parity and the central bank decided to draw a line at 1 EUR = 1.20 CHF. Mind you, then you look at all the debt of the Swiss banks...

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   206 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.