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Strategies & Market Trends : Currencies and the Global Capital Markets
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To: Thomas M. who wrote (2760)12/28/2000 8:05:42 PM
From: Hawkmoon   of 3536
 
It could be ineptitude, or their belief that a weak currency would boost their economies (always a loser's game).

But it's worked for them over the past several years, and as a result has created a tremendous trade surplus with the US.

From the perspective of European businessmen, a weak Euro is obviously ideal (except for energy costs). But the ECB frets when the currency they gave birth to weakens like it has. They think everyone would be overwhelmed with excitement about the unification of the European markets and that the creation of such a full and free trade zone would spur tremendous growth.

But it just hasn't happened. Sure, they've had 1-4% economic growth, depending on the individual nation, but in the process the value of their assets in USD terms have been reduced by 30%. How much growth would they have enjoyed without such weakness in the Euro?

I think if they get back to parity with the USD, their growth will probably slow from where it is now.
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