March 24, 2005

REALITY ALWAYS DAWNS:

Euro slips as reports show weak recovery (Reuters, Bloomberg News, March 24, 2005)

Somber economic data drove the euro to a one-month low against the dollar Wednesday and dealt a dose of reality to European Union leaders debating how to make the bloc the world's most powerful economy.

An important gauge of German business confidence showed an unexpected downturn, and data from Italy weighed on the euro as well, along with news of a euro-zone trade deficit and a drop in new industrial orders.

Those data were followed by a stronger-than-expected U.S. consumer price report, suggesting the Federal Reserve Board might raise interest rates more aggressively than previously thought, traders said.

"This isn't good news for the euro," said Mitul Kotecha, global head of currency strategy in London at Calyon, the securities unit of Crédit Agricole. "It's a very contrasting picture between the U.S. and Europe on growth and the U.S. wins outright."

At a meeting devoted to economic strategy, EU leaders toned down the ambitions of the so-called Lisbon Agenda, a 10-year plan to overtake the United States as the most dynamic economy.


Want some cheese to go with that surrender?

Posted by Orrin Judd at March 24, 2005 9:02 AM
Comments

The Europeans will be very lucky if in 10 years their "economy" is not smaller than it is today.

Posted by: ratbert at March 24, 2005 10:25 AM

heheheheheHAHAHAHAHAHAHA!

The Japs are shipping their American-made cars to Europe because it's profitable. And whoever makes Qwest/Quest is shipping a few thousand to China.

Toyota's building 2 new plants and Hyundi's building 1.

American cars equal their EUSSR counterparts.

Who would have thought we'd see this in the 80s????

Who's cuisine reigns supreme?

Posted by: Sandy P at March 24, 2005 10:40 AM

And yet I go to meetings with portfolio managers and foreign currency traders who steadfastly believe the Euro will be king and the US Dollar on the scrap heap in 5 years. Somebody/something is out of whack.

Posted by: AWW at March 24, 2005 4:42 PM

Some folks love tight money policies even if economic conditions indicate they are completely unwarranted. You would think that the EU decision to allow the big nations to violate the 3% deficit standard would provide some indicator that even the EU is realizing that their attempt to squeeze the dollar was a loser.

Posted by: bart at March 24, 2005 5:19 PM

When have the ever stopped biting off their noses to spite us?

Posted by: oj at March 24, 2005 5:23 PM

The dollar has been declining for three years, and now that it pops up a little, people think that the dollar is king and the Euro is toast?

Don't cash in your Euros yet, some of this has to do with hedge funds scrambling to buy dollars to pay off their short term debt before rates get too high. There are a lot of people on the wrong side of interest rate bets.

Nothing goes straight down, even bears need to take a breather.

Posted by: Robert Duquette at March 24, 2005 6:12 PM

i remember back in the 70's when it was fashionable to put your savings into mexican banks, and get 15% interest. and then the peso began to drop against the dollar, and drop, and drop, and drop. it has never come back and all that money is gone. look at the fundamentals of the situation -- europe is so uncompetetive compared to the u.s. it isn't funny. the european central banks can prop things up for awhile but eventually gravity causes the entire effort to collapse.

Posted by: cjm at March 24, 2005 7:32 PM
« WHAT WOULD OUR GRANDFATHERS SAY?: | Main | THE HARD BIGOTRY OF THE SOFT HEALTHY: »