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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Robert Douglas who wrote (2755)	12/28/2000 10:04:12 AM
From: Hawkmoon	Read Replies (2) \| Respond to of 3536

The euro never fell below $1 until a year ago, Uhhh Robert, the Euro in its current form, did not exist until January, 1999, and been going nowhere but downward ever since then: futures.tradingcharts.com That means that Europe has to reduce the value of their currency by 30% before they were able to spur economic growth in Europe. That suggests, if not dictates, that it was export led revenues that generated that additional GDP. Now everyone is betting that a higher Euro means a golden age for Europe, when there has apparently been little regulatory change, or tax cuts in Europe that would promote higher growth. They have discussed it, talked about personal retirement accounts (that provide investment capital), reducing the fuel tax, reducing social entitlements, reducing trade barriers,... etc... But they only talked as far as I have seen. Yapping their flaps, but never casting the votes necessary to incentivize capital flows into the continent. And please don't get me wrong here.. I'll be happy is Europe finally shows us they can pull their own weight without having to devalue their currency, or erecting protectionist barriers. Regards, Ron

To: Robert Douglas who wrote (2755)	12/28/2000 10:34:57 AM
From: Louis V. Lambrecht	Respond to of 3536

Robert, mostly agree. Europe is not an export dependent region. Neither are the US: both regions make about 15% of total trades with exports. Warnings from companies taking a weak Euro as an excuse for lowered sales seems a bit overstated to me. Add to this, that with more countries entering the Union, Europe will be even less dependent on exports. But this is a multi-years process. I look for the dollar to sink to a cyclical level of about $1.1 per euro and longer range fall to $1.2-1.3 per euro. Checked the statistics of the ECB. Unfortunately, the Euro data only have been computed from Jan 1990. In these 11 years, the median price for the Euro is at $1.1983 (max 1.4583/ min 0.8252) and Yen 136.5 (max 197.29/min 89.3). These 11 years do not include the Reagan Dollar which would lower the median price. Fall of the Dollar? IMHO nothing more than a return to average. The US will provide lots of the technology that Europe needs to fuel their expansion. And vice-versa: cell-phones, cable networks or copper semi-conductors to name a few are among Europe's strenght. (I'll remain silent over voice technology with that LHSP fiasco.<g>). But agree, Europe is net importer of technology.