The Euro is at its strongest ever level against the dollar. Not since the currency hit the streets in 2001 has it ever been worth more than 1 dollar 40. But it is now. And the dollar has also dropped to 15 year lows against several other major currencies.
Generally, the trend in the euro's performance against the dollar has been a steady rise, judging by the average annual values given for the currency. This latest peak has been partly put down to America's recent interest rate cut, which means people who put their money in dollars do not get such a high return.
The chief economist at Commerzbank, Joerg Kraemer says: "The euro has reached an important psychological level. But over the last 12 months its rise in value against the dollar and other trading partners' currencies has been restrained, so I don't think anyone should look at a drop in economic activity this side of the Atlantic because the euro is at 1 dollar 40."
Hints from the European Central Bank about interest rate rises and stronger European growth have also helped push the euro up. The implications are mixed. Some imports will be cheaper as a result. Raw materials which are priced in dollars like oil and metals will be cheaper for European manufacturers to buy. On the other hand, their finished products will be more expensive for consumers in the US - Europe's largest trading partner.
http://www.euronews.net |
