Posted on 06/02/2005 6:43:53 PM PDT by CHARLITE
The U.S. dollar is getting a boost from the slide in the euro caused by voters' resounding rejection of a European constitution in France and the Netherlands.
The respite from the dollar's three-year tailspin offers a bit of hope for travelers who are looking to hold down the shocking cost of a European vacation since the dollar lost nearly half its value against the euro at the end of last year.
"Americans will eat out more in Paris, buy more Burberry coats in London and more diamonds in Amsterdam," said Bob Whitley, president of the U.S. Tour Operators Association.
The euro dipped below $1.22 in New York trading yesterday, an eight-month low. The currency has lost more than 10 percent of its value against the dollar since the beginning of the year.
Perhaps even more significant than the regained purchasing power, analysts say, is the renewed luster of the dollar as the world's reigning currency.
The euro's ascent since 2002 had inspired speculation that it eventually might supplant the dollar as the choice of businesses, central banks and investors worldwide.
Having the predominant currency in the world offers many benefits for a nation and its consumers, creating a positive cycle of investment and growth, as well as lower inflation and interest rates and higher living standards.
Europe's leaders made little secret of their hope that the fledgling European currency, introduced in 1999, might someday enjoy the advantages of the dollar.
But this week's referendums appeared to clinch the conclusion of many financial observers that the European Union is not ready to assume such a title role.
"Europe is increasingly viewed as a dithering, dysfunctional family," said Joseph P. Quinlan, chief investment strategist with Bank of America.
(Excerpt) Read more at insider.washingtontimes.com ...
Yay!
Adolf Schroeder and Napoleon Chirac -- need we say more ??
Unclear why a strong dollar is so desirable at this point...
Agreed. It isn't.
Well, Soros and Buffett bet big on a declining dollar. Hopefully their egos got the better of them, and they bet everything on the dollar crashing, and they'll end up like the Dukes at the end of Trading Places.
Anything is possible, but I doubt it. I think the dollar shows signs of reaching a peak in this intermediate correction to its decline.
I wouldn't bet against Warren Buffet.
Clive Mound has a suggestive technical analysis of where the dollar stands, published a few days ago:
http://www.321gold.com/editorials/maund/maund060105.html
I'm not suggesting that Freepers should short the dollar, but I wouldn't bet on it going much higher.
Well, Soros and Buffett bet big on a declining dollar. Hopefully their egos got the better of them, and they bet everything on the dollar crashing, and they'll end up like the Dukes at the end of Trading Places.
B of A is my bank. I'll stick with them if they keep guys like this.
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