More a more foreign countries, who have traditionally been investors of US Treasury Securities, are expressing concerns about the weakness of the US Dollar in the global marketplace. China and oil producing countries are at the center of the debate and are encouraging international finance authorities to review the effects of the weak US Dollar.
Do you think we will see the Euro replace the US Dollar in international market transactions over the next decade? Why? Or, why not?
What effect can the current US deficit have on the US Dollar?
Why is it important for the US to maintain a strong US Dollar and why are monetary authorities not pursuing a strong US Dollar policy right now?
What kind of effect can a weak Dollar have in the US financial markets and the economic recovery as a whole?
Tags: Weak US Dollar
I believe that the Euro will not be relacing the US Dollar in international market transactions any time soon. According to an article on October 18 in the New York Times, “a weak dollar could prove beneficial to the American economy by aiding long-suffering manufacturers, rebuilding a stronger industrial base and lifting exports even if it makes life harder for trading partners around the world, especially in Europe”. The US deficit however is no helping make the Dollar any stronger, the continuing spending and increasing deficit is just making things worse. With the dollar declining, this economy can not recover as a whole, “As the dollar devalues, we have less capital and purchasing power compared to the rest of the world, and there is an increasing risk of higher interest rates and inflation”. The Dollar needs to make a serious come around if we want to get out of this economic down turn, and possibly before the Dollar is taken over by the Euro.
I do not believe that the Euro will ever replace the US Dollar because according to Economics help it states that, “it is historically the strongest, secure, and the most powerful in the economy”. Although, because the dollar has fallen 70.9% to 64% countries are switching from the dollar to the Euro because they fear that the dollar will ruin their country’s economy just like it has for the US. Also, a product like oil is priced in dollars because it is the most common currency, but one issue is that some countries already replaced the dollar with the Euro because it is losing its value. Secondly, companies like Pepsi, IBM, and Mc Donald’s are using the US dollar so it can boost sales. Hopefully when the US Dollar makes a comeback none of these issues will be repeated in near or distant future.
No, the Euro will not replace the US dollar per say, but in terms of an individual’s income, they may be given the option of what type of currency they would like to receive. Furthermore, new laws may be enforced that specify the type of currency an individual can recieve as income, e.g. for discussion purposes, the fictional “Currency Clause” could be passed that will state “no individual will be paid in terms of an alternate currency than that is not the dominating currency in a particular region where contracted to work.”
The US dollar, like any other historical currency, fluctuates in worth relative to the country’s economical situation due to inflation rates and other means. One day the US dollar will once again be a prominent means of currency.
As discussed in class, the current US deficit effects the US dollar. The net worth of the US dollar is much less than that of its historical net worth. It is important for the US to maintain a strong US dollar because it is directly correlated to our country’s power. Money = power. A weak dollar will drastically effect the financial markets.
I believe we will not see the Euro replace the US Dollar in international market transactions over the next decade. I feel this way because the Euro’s share in the international market is much smaller than that of the U.S. dollar. The effect of the current US deficit on the US Dollar seems to be inevitable and substatial. It is important for the U.S. to maintain a strong U.S. dollar becuase if it weakens, we stand the chance of losing the spot as the strongest currency in the world.
First of all Euro won’t be replacing anything anytime soon. I just don’t believe that because as history states, America broke away from Europe and everything that consisted of Europe. It doesn’t mean we don’t like them, but Americans at the time figured it’d be best to start our own system. I guess the reason we won’t switch to Euro is probably due to that factor, but also every place has its own currency so it may be location and conversion issues. Now the deficit can create problems such as inflation, or high interest rates for trade amongst other countries to continue. According to the WSJ about the monetary program, “Higher taxes on capital gains and income; new entitlements that will require trillions of dollars in new U.S. borrowing; a wave of new antitrust enforcement, more telecom regulation (”net neutrality”) and trade protection, new restrictions on energy production, easier rules for union organizing, and so much more. All of these are signals that U.S. growth is likely to be slower than it otherwise would be, and that the returns on investing in America will be lower than they should be.” which in turn can explain why we need to build the dollar back up instead of increasing any policy for the time being.
The international role of a national currency has many dimensions. In domains such as foreign-exchange trading, single-currency dominance can be expected, and there is no evidence that the euro is displacing the dollar. In domains such an portfolio management, diversification can be expected, and the advent of the euro is having discernable effects. In still other domains, such as reserve management, outcomes depend on these two tendencies jointly; the currency-composition of reserved depends on the roles of various currencies in foreign-exchange trading but also depends on the forces governing other forms of portfolio management. Thus far, however, the reserve role of the euro has not much exceeded that of the (deutsche mark). The paper predicts a growing role for the euro in the monetary and currency regimes of countries that will soon join the EU but finds no reason to believe that the euro will displace the dollar as the main international currency.
The current US deficit which is currently in the trillions of dollars will have a very adverse effect on the US Dollar. Fred Bergsten; a director of the Peter G. Peterson Institute for International Economics, in his article in the foreignaffairs.com stated that large external deficits pose substantial risks to the U.S. economy because foreign investors might at some point refuse to finance these deficits on terms compatible with U.S. prosperity. Any abrupt discontinuation in lending to the United States would force the dollar value down, thrust inflation and interest rates up, and possibly cause a hard landing for the United States and the world economy at large. But it is now obvious that it can be equally or even more damaging if foreign investors do finance large U.S. deficits for prolonged periods. Thus I believe that the substantial current US deficit will have undesirable effect on the US Dollar if not kept in check.
I do not think that the Euro will replace the US dollar a decade from now. According to the NewYork Times “Since most commodities are priced in dollars, they become more attractive to non-American investors when the dollar is weak and more expensive when the dollar is strong. Analysts also said some investors were looking to pocket gains after a stock market run that has stretched nearly eight months and taken last week’s share prices to their highest levels in a year.” As for the dificit as the dollar decreases so does our power to purchase and results in less capital. Therefore the economy cannot recover as a whole if we slip furthur into dificit. It is inportant to maintain the US dollar because it is the most common form of currancy. I’m hopeful that the dollar will make a comeback.
I believe that in order for the US dollar to become stronger, we have to focus on a more strict monetary policy. This, eventually will increase the value of the dollar. We also have to restrict the money supply of the US dollar overseas and internationally to increase the demand of the US dollar, so as to create a stronger value. Furtermore, we have to focus on selling more products from the US than buying from overseas and to do this we must create a stronger economy, thus creating more jobs, productivity and decreasing unemployment. I do not believe the Euro will replace the US dollar, at least not in this next decade.
I think that the euro will not displace the US dollar as in international market in the next decade. The US dollar is the largest currency in the world because most of the international transactions in the market are settled in dollars. According to the Foreign Affairs magazine “The global economic crisis has revealed the folly of large U.S. budget and trade deficits, as well as of the strong dollar that makes them possible. If it is serious about recovery, the United States must balance the budget, stimulate private saving, and embrace a declining dollar.”
It is important for the US to maintain a strong US Dollar because it needs to maintain the global investors interest for financing its deficit, and also because it needs a smooth foreign relations especially with the Europeans.
The dollar is in a very weak state at this point in time. our nation is hardcore in debt and the dollar is definitely taking a big hit at this point. other countries are becoming very hesitant to deal in dollars at this point. the euro is looking very attractive to other nations who feel it is a better option than the drowning dollar. however as a new york times article states “currencies are like political parties — they look awful until you consider the alternatives. many people believe Europe may face deeper and tougher financial crisis than that of the US. it may look bad at this moment but it is tougher than it seems to take over the dollars spot at the top. at this moment most central banks hold the dollar as their currency (about 2/3 of the reserves are in dollars). so i do not believe that the euro will be taking over the spot of the us dollar. as bad as it seems the dollar will make it through the storm it is in at the moment.
Even though the US dollar has not been this low in nearly a decade, i do not feel that the euro will replace the dollar in international market transactions over the next decade. According to an article on NPR.com written by Eric Weiner, it states that “A weak dollar can be good for the U.S. economy, because it makes American exports cheaper and, therefore, helps close the trade deficit. When looking at the effects the deficit has had on the US dollar, there are many things that have already been showing for some time. In the same article on NPR.com, “The most obvious effect of a weak U.S. dollar is its impact on American tourists traveling to Europe. In Paris, $7 cups of coffee and $50 taxi rides are suddenly de rigueur. A weak dollar affects even those American consumers who never leave home. If you have a penchant for German cars or French wine, expect to pay more, as European manufacturers raise prices to compensate for the weak dollar.” One of the main reasons monetary authorities are not calling for a strong US dollar policy is because the weak dollars works out well for them. Since there foreign currency is worth more, they have to use less of it here. Eventually, if the dollar stays weak, foreign investors will be less likely to put money in U.S. Treasury securities without much higher interest rates — and that, in turn, can make it more expensive for American consumers to borrow.
I personally do not believe the Euro will replace the US dollar. Despite how weak the dollar and country is financially I think things will turnaround. Throughout history the country goes through cycles, yes it will take a while but I believe the country will be strong again. The US dollar is responsible for basically the global economy which is why it would not be able to be replaced. According to the New York Times.com a column written by Floyd Norris said the following “In February, the dollar hit a high against most currencies amid fears of worldwide recession and a desire for the safety of American investments.” The current deficit will just make it harder for the dollar to get stronger which is why I believe it will took a long time for the dollar to get stronger. It is important the dollar get stronger for the country as well as for the betterment of a stable global economy. Due to the fact it is so weak this is the main reason why powerhouse countries and places like Europe as well as China are looking at alternatives this is why a turnaround is urgent. I believe however the country we will and the US dollar will remain at the top. A weak dollar will take the economy a while get better but I believe with time the country and the dollar will be stronger. This is why I do not believe the Euro will replace the dollar.
The Euro could replace the US Dollar in international market transactions in the next decade. In an article by Guillermo Dehesa, “The Euro’s share in the different international markets is, on average, still much smaller than the US dollar’s, with minor exceptions. The rate of growth of its share, in the 10 years since its creation, was high at first and lower later, coinciding with an accumulation of global imbalances. In any case, its present rate, if maintained, could be enough to overtake the US dollar before the end of this century.” While it is possible, I don’t believe it will happen.
The US dollar will never be replaced by the Euro in International trade. Many countries have large US dollar reserves and by changing to another currency they would take a large loss on their money. For the US, the weak dollar could have a positive effect by bringing outsourced manufacturing back into the US which will in turn create jobs and benefit the overall economy. With manufacturing back into the US we would be able to grow the value of the US dollar. It is important to maintain a strong US dollar to grow our economy and create long term growth and sustainability in the US.
The US dollar is currently weak but saying so the euro will not be able to replace the dollar in a decade. Just in making the transition from dollar to euro will cost every country money and time. Money and time they can’t afford to lose just to be able to replace the dollar to euro. Not only that but the US economy would drop drastically because the dollar won’t be worth much to other countries. The U.S will no longer be looked as a strong country, and that would definitely affect the US financial markets and affect the everyday lives of americans. I believe that even though the US dollar is losing its value now in the future it will recover, its gonna take time but I don’t see the dollar losing it’s position to the euro anytime soon.
Whatever happened to the strong American dollar? If OPEC oil could be sold in other currencies the Euro then us economic dominance dollar or hedge money would be seriously challenged more and more. Oil importing countries would acquire the Euro as there reserve so to value would increase and large amounts of trade would be transacted and denominated in euros. In such circumstances the value of the dollar would go down. The world oil markets speculate between 20 and 40 percent.
Even though dollar is weak these days, but still Euro will not be able to replace dollar in the international market. There are difficulties in the economy, which is the same thing as for the value of dollar. In the article from New York Times, “Oil prices hit new highs for the year Wednesday just as the dollar fell to new lows against the euro, showing how much the weak American currency has come to dominate energy markets.” This shows that if dollar is going low, then it will affect the other things to in the world. If Euro had to replace dollar then it would have happened long time age, it is not possible to replace dollar that easily because somehow world’s economy depends on the dollar.
i beleave that it is very possible that the Euro will take the US dollars place in the international market place only becuase it has more value to it. The Euro as it stands is worth almost one and a hlaf time the US dollar.
Obviously if other countries can see that the US dollar bill is going down in worth why not switch to a form of currency that is actually worth something to gain. Also its important to maintain our US dollar bill becuase its the currency weave grown to love not only that right know its the world wide currency excepted every where if we lose the value of our Dollar bill we would have to switch over to euros currency and the system would have to take some getting use to. So all in all i think it would be a huge hasle to go through all the changes so the USA needs to step up its game in the market place and make some right moves so we dont have to think about changing our currency.
I believe that the euro will not replace the US dollar in the U.S.A. but in other countries it will. I believe that the euro will replace the US dollar because of our large amounts of debt that we have. Currently the U.S.A. is making so much money that the worth of it will go down and euro will take over. It is important for us to maintain strong the US dollar because if we don’t we lose all the power we have. A lot of countries are using the US dollars right now that means we are receiving money from them to use that dollar. A weak dollar can have a big affect to the U.S.A. we can lose a lot of power and lose business with a lot of foreign countries.
I believe that the Euro will not replace the dollar. I say so because according to the Econimistsview.typepad.com they say that 2/3 of the world is still dealing with US currency. Even though the Euro is in more value in todays market. This can affect USA because investors are starting to take money out of the market and putting them into other markets world wide. The dollar dropped 10 % . Many people are suspecting that we already hit rock bottom and we need to grow now.
It’s quite possible the Euro will replace the US Dollar in international market transactions, or will be traded as an equally important reserve currency over the next decade. The dollar has depreciated and the United States has an outstanding deficit witch is causing some countries to loose faith in the dollar has their international reserve currency. While it is important for the US to maintain a strong US Dollar being number one in international transactions doesn’t offer much and devaluation isn’t necessarily a bad thing if the dollar is worth less than another countries currency thin the businesses of said country will invest in American business increasing exports and related output. In the end whether or not the euro replaces the dollar shouldn’t be that important to Americans has opposed to maintaining a strong GDP or raising employment levels.
According to economists the euro is growing, and more countries are starting to adopt it (Hal Varian). I do not believe that the euro will replace the dollar, it has been our currency forever. The dollar is worth less than the euro and is comparable to the U.S. dollar in GDP and trade openness (Hal Varian). There has also been an increase in the shares of the euro and the dollar. Even though the euro is becoming more and more popular, I do not believe it will ever replace the dollar.
The euro wont replace the U.S dollar anywhere in my view even if the euro is becoming a little bit more popular. The U.S dollar has been used around the world for years and i don’t believe the change to push the euro in will come. unfortunately how the economy is the u.s dollar is weak and thats what causing concerns about the euro taking its place.
I believe the Euro will replace the US dollar in the international market transaction because the Euro was still able to issue and Transport currency around the world even though the two nations went through the worst economic crisis since the 20th century. The US Dollar is in a weak position right now since interest rates are rising and US trades and budget deficits are increasing. Also, I believe other countries such as Canada, Europe, North and South Korea, etc; will increase their interest rates to make the US Dollar weaker. Its important to maintain our US Dollar so the nation can continue to maintain its strong power of currency. Also, it allows hard working employees to continue to receive hard earned cash.
i do not believe that the Euro will replace the dollar in international market transactions over the next decade because in the crisus our country is still in, the dollar is still up about 9% against the euro. Reports from CNN say “The U.S. was one of the first nations to respond to the weakness with aggressive monetary policy measures. So it could be one of the first countries out while Japan and Europe might be the last ones out,” ” as bad as the U.S. economy is faring, it’s much worse in other parts of the world. So the dollar is being viewed as a relative pocket of stability.” So i do not see the Euro taking the US dollars place.
I personally hope that the Euro will replace the U.S. dollar because it would be a good change for the U.S. because 1. the dollar is down and 2. it would bring the U.S. closer to the European counties. Nearly everyone know that the dollar is down, last time I heard the dollar was only really worth about 97 cents. If the Euro were to come to the U.S. it would connect countries with a common currency and it is a more stable and stronger currency compared to the dollar. Many people have started to noticed that the Euro is indeed stronger and more stable than the dollar and even considering switching to the Euro. Hopefully either the dollar makes a comeback or a helping hand will pick us up with the Euro.
Sometimes I wanna quit this song and become an accountant now But I’m no good at math and besides the dollar here’s down – Fall Out Boy
Do you think we will see the Euro replace the US Dollar in international market transactions over the next decade? Why? Or, why not?
What effect can the current US deficit have on the US Dollar?
Why is it important for the US to maintain a strong US Dollar and why are monetary authorities not pursuing a strong US Dollar policy right now?
What kind of effect can a weak Dollar have in the US financial markets and the economic recovery as a whole?
I do not think the Euro will be replacing the US Dollar in international market transactions. Do I think it should, yes. The US Dollar right now is down and when exchanging money with dollars you loose so much money. Just last year I had to exchange my money from US Dollars to Euros and with $1,000 I only got back about 800 Euros. An article in the USA TODAY says “Just about every day seems to bring more bad news for the dollar. Recent months have witnessed a steady erosion in the greenback’s value, down 16% since March against the currencies of the top U.S. trading partners. On Wednesday, the euro broke through the symbolically important $1.50 barrier for the first time in 14 months.” My opinion the US Dollar obviously has a lot to do with the bad economy right now. But I dont think anything is going to change with the US Dollar being the internation bill but who knows the way things are going right now arn’t so good, so it might be time to think of a new plan.
In my personal opinion, I don’t think the Euro could ever replace the US Dollar in the future because. The US Dollar has been the International currency for a long time, despite the weakness the dollar is currenttly experiencing in the international market; we could also take advantage as well. For instance, according to Erick Weiner of NPR.org, he stated that a weak dollar is also good news for American manufacturers. Their products are now less expensive, so they can sell more. That’s why companies such as Boeing and Caterpillar like a weak dollar. It’s also why many economists like it. As these big U.S. manufacturers sell more, the U.S. trade deficit shrinks. But eventually, if the dollar stays weak, foreign investors will be less likely to put money in U.S. Treasury securities without much higher interest rates and that; in turn, can make it more expensive for American consumers to borrow. In conclusion, we can see the advantage and disadvantage about the current weakness of the US dollar, but if we see the economic growing as well; we don’t have to be concerned about the weakness of the dollar.
The chances of the Euro replacing the US Dollar is a on the border line of happening and not happening. Obviously the US Dollar is weak and The New York Times stated that three possible ways for the US Dollar to get stronger is (1) deflation in the United States (2) inflation in the rest of the world (3) a depreciation of the dollar against other currencies. I highly doubt any of those 3 things are going to happen so the dollar is going to remain weak for a while. Even with a weak dollar, not even George Bush and Treasury Secretary Henry Paulson Jr are not trying to rule out intervention in the currency markets to prop up the dollar. The idea os having a strong dollar right now is important but probably will not happen anytime.
I do not believe the US dollar will be replaced by the Euro in the future, but the possibility of an option to choose the desired currency isn’t too far.The dollar’s value has sunk 11.2% on the New York Exchange in just four months. In fact, the inflating dollar has hit its lowest level of 2009 against six major currencies, including the Euro, the British pound and the Swiss franc.(MoneyMorning).Six currencies currently battle the US for alternate use of currency. The inflation is at its lowest but i do not believe it will ever get low enough that it will changes its position. The drop in the economy caused much of the problems for the dollar and once the economy rises more the desire for the dollar will be back. If the US dollar is not maintained as a leading source of currency it could cause a lot more difficulties for a country that has so many already. The US dollar can go in two directions and it is whether the economy rises that will determine its fate.
i don’t think that Euro will replaceing the US dollar in decade. The US Dollar has been the International currency for a long time. The economy is worse right now but the economy didnt go worse first time. it’s has been gone many times in last ten decades. the US dollar will remain the international currency. i think it’s not going to change anything about the international money. The US dollar is going down right now because the US government borrow the money from the other country. but once the economy start improving, the dollar will go up soon or later. I think the US economy is start improving so it’s will be all right. Euro will not take place of the dollar in decades of decades
I don’t think the Euro will be replacing the US dollar any time soon. Change in the international marketplace happens all the time and just because the US dollar is significantly down doesn’t mean its history wont keep it the favorable currency. Every currency fluctuates and positive and negative things result but historically the US dollar has all ways rebounded and helped the world market. In an article by the Washington post they talk about how Europe and Japan fear a fallout but also mention the dollar is only weakening because of the US attempting to get out of this economic slump. I believe that by the time we are out of this depression and the dollar is rebounding talk of the Euro replacing the dollar will be a conversation of the past.
US dollar is not replacable by the Euros, at least not in a decade. US dollar is an acceptance all around the world. Yes the US deficit could cost us the weakness in the US dollar. The dollar value is based on the economy, since we are not doing as good the US dollar value is down as compared to before. According to WSJ the euro value went from 1.47 to 1.48 by wednesday which is less compared to the other times. For the first time the GDP rose about 3.2% since the second quarter of 2008. So the rise in GDP would help us with the economy. The weak US dollar would worsen off the economy and would be dangerous for the other countries. Some of the countries economy is based on the US Economy so it is important for us to gain our original dollar value.
The Euro will not replace the US Dollar in international market transaction any time soon. The US Dollar has been the strongest and most powerful in the economy. The US Dollar needs to maintain the strongest and most powerful because if it weakens there’s a great chance the Euro can replace it. As for the deficit, as the dollar decrease so does out power to purchase and result in less capital. The current deficit will just make it harder for the dollar to get stronger. The US needs to focus on selling decreasing employment, purchasing, and selling more products so our US Dollar can become stronger before the Euro takes over.
I do not believe the US dollar will be replaced by the Euro, although it would be a positive step the US could take to help redeem people’s money. Initially, the dollar had a strong fundamental and had the longest reliable history of increasing purchasing power. “Today’s dollar has long since lost both those qualities.” states Eric DeCarbonnel, editor of Market Skeptics. Considering this, the Euro looks like the best candidate. It is in the US’s best interests to replace the dollar with the Euro in order to get the money the people have back into circulation.
The dollar has held its ground so far but it soon will be replaced by its rival the euro. In the article published in The Wall Street Journal “As Budget Deficit Grows, So Do doubts on Dollar.” Claire Dissaux states that the dollars loss of influence is a steady and long term trend. I believe the U.S. dollar will be replaced by the euro in the future. Also stated in the same article in The Wall Street Journal was that bonds could be a great influence in the U.S. dollar weakening. As the returns of bonds are set to a fixed interest income the bonds are becoming less attractive to investors. There for I see the dollar being taken over by the euro in the future.
Although the value of the U.S. dollar is currently much lower than that of the Euro, I don’t think we will be transitioning to any other form of currency in the future. First of all, it would be too much of a hassle for the countries using American dollars to make the transformation. It would also be very time-consuming and costly to make all of the new money, switch it with the old money, and educate people on it. I think it would be wise to stick out the recession for a little longer and see how it goes; chances are, the value of the dollar will rebound. For now, we should take advantage of the dollar’s decrease in value and save money on importing and exporting goods to other countries. This way we aren’t further jeopardizing America’s economy by losing the power it has, since our widely used currency contributes to it.
I do not feel that the Euro will replace the American dollar as a new form of currency. However, there is the possibility that the Euro may be used as currency in foreign trade. The current US deficit has mostly negative effects. The US will end up paying more to pay off international debt also a decline in foreign investors. However, the one positive effect is there will be an increase in exports. Domestic goods will be cheaper to buy for some foreign countries. It is possibly that because there is a little benefit from the weak dollar it’s not being pursued by monetary authorities. The weak dollar could lead to it not being ‘the strongest form of currency’.
I do not believe that the euro will replace the US dollar in the next decade. According to an October 12 article in the New York Times, the American economy is still the largest in the world, and with so many trillions of dollars being held by foreign governments, the dollar’s dominance in world markets is not likely to fade quickly. The article goes on to mention that a weaker dollar, while raising the prices of imported goods like oil, also helps give American manufacturers an edge in foreign markets by decreasing the relative price of their products. Michael Woolfolk, senior currency strategist at Bank of New York Mellon Corp, expects the Federal Reserve will start raising U.S. interest rates which would make the dollar more appealing to traders, because it would cause the assets priced in dollars to have higher returns. For these reasons, I do not believe the euro will replace the US dollar any time soon.
I don’t believe that the U.S dollar is going to be replaced anytime soon. I say that because according to the Washington Post, having a weak dollar is boosting our economy for right now. The long term effects could be catastrophic. “The dramatic decline is aiding the American economic recovery but setting off alarm bells overseas….calling it among the biggest threats to the rebounds underway in Europe and Japan.” Exchange rates are changing for the worse. China is turning away from the dollar as a backup. The U.S having a weak market can help our economy by making thing cheaper but as far as international financial markets its not helping. WE need our dollar to be just as effective in other countries to keep the global economy strong. While the euro is currently worth more it isn’t necessarily making things better for them over there.
Right now I don’t see the dollar being replaced as the next world currency, I think it will be more like 50 years down the line. The Euro has been gaining popularity among many other nations because it has been showing positive figures while the dollar is losing its value. The current U.S. defecates are causing the dollar to become weak because there is not enough money being spent to bolster the economy. I think that the U.S. should be more concerned with the current situation because it is causing America to loose creditability with our overseas investors such as China. Our current economy is currently struggling with a weak dollar and the first step to fixing the economy is to strengthen the value of the dollar.
If the dollar bill remains weak, I believe Euro will replace the US Dollar in international market transactions over the next decade. US dominate the market place. If the US currency is weak, most likely foreign businesses will take over the markets and drive the economy. According to the Wall Street Journal, “The dollar fell against other major currencies for the first time in five days, making commodities more attractive to foreign buyers. The ICE Futures US dollar index, a measure of the dollar against a basket of currencies, slipped 0.7 percent in afternoon trading after gaining 2 percent over the past week.” As you can see, it took two weeks for the US to go up 2 percent but drop very quickly as well. So there is a possibility of Euro replacing the US Dollar. Remember we live in capitalist economy.
Yes I do think that the Euro will relplace the US dollar in the international market transactions because a lot of counties are become more economically strong then the US. Inflation has cause the dollar value to drop, the way things are going it would almost make sence to slowly move the dollar to the Euro because it would make trading a lot easier, and might even help the growth of the US economie. The way things seem is that the US might get cought up into changing to the Euro, just so the value of the dllar doesnt get any smaller.
The state of the US Dollar might seems weak but Euro replacing the US Dollar in the international market transactions over the next decade will not happen. If you listen to the news today you will know that the US is on it way to economic recovery. According to the BBC today, US is officially off recession, that translate to confident on international market transactions. Outside the US, Dollars is still the envy of the international monetary transaction. The business world prefer the US dollar to any other currency. However, the effect a weak Dollar in the US financial markets and the economic recovery as a whole can be very detrimental to the standard of living to the consumers. The rise in price of goods and services means inflation, less buying power for the American consumers.
The US dollar may not be as current and stable as it once was but i do not beleive the the Euro would be a more stable international currency for international market transactions. The Euro has been holding it worth steady for about 7 months according to the article “Asian Stocks Extend Losses” but that does not seem long enough to be able to consider seriously changing the international currency. The US deficit has a big influence on the people who invest with the US. I beleive it makes this country look bad at the fact that they can not pay the debt off in full and keep it payed off with all the money the goverment gets in taxes. I still dont beleive it is a good idea to change the currency at this point, if the US dollar stays below the Euro it may happen but i beleive it has not held its value long enough.
According to Dave Gordon, ex director of policy planning in the U.S. State Department, “…The financial stability of the United States and the financial recovery of the United States is crucial to their own economic and financial futures…” Lies on the strong US dollar. The dollar being strong is a starting point in recovering our economy. However, if our economy does not recover, it is projected that the Euro could overtake the dollar in international markets anywhere between 5 and 10 years. The way our economy is going, I do think that the Euro may become the currency in which international trade takes place.
It is very possible that there could be a switch from U.S. Currency to the stronger Euro. It is causing tension overseas by creating long-term structural problems. If Europe doesn’t see the change than it may force down the wages and hurt employment. Also people trying to import and export goods are facing losses when dealing with the currency exchange. Manuel Rodriguez Bordillo, director general of Spain’s Agrosevilla, one of the world’s largest olive exporters claims that “There’s no way this can continue; we’re losing 15 percent [in revenue] this year just because of the exchange rate.” One major reason for crossing over to Euros as a whole. Although it seems that it should work, the current U.S. deficit weakens the U.S. dollar. In theory, when the U.S. dollar is weak, as it is now, U.S. companies benefit because U.S. goods should appear cheaper to overseas consumers and U.S. companies should get a boost converting foreign sales back into dollars. But according to a currency expert at Brown Bros. Harriman. “Just because there’s a weak dollar and you buy (stock in U.S.) multinationals, it might not work out,” he says. “There’s no shortcut to investing.” Point being the weak dollar does not benefit the U.S. economy.
I do not think the Euro will replace the US dollar any time soon. Even despite the current weakness of the dollar and the country’s financial status. I feel it won’t be replaced because the US dollar is responsible for almost all of the global economy. It is important the dollar get stronger for the country as well as for the betterment of a stable global economy. I think the US dollar and the US as a country will keep its spot at the top. Over the course of time I think the dollar will regain its value across the globe as well the state of the US economy regaining its strength.
Do you think we will see the Euro replace the US Dollar in international market transactions over the next decade? Why? Or, why not?
I think that the Euro will probably not replace the US dollar as the international form of money within the next decade. one reason for this is because a great deal would need to be changed. systems would need to be converted, computer programs (the ones that do the converting) would need to be altered, and [most importantly] the wealthier countries would have to comply with this. large, wealthy countries, such as china and India, have many of the bonds of the US debt in their possession. if the market started using Euros instead of Dollars, those bonds would not be as valuable to them as they were when the dollar was used. before they would want the system to change, they would want to get rid of their US bonds. this could happen, but it would be a gradual process that, in my opinion, would take more than 10 years to occur (with all the switching over). that is why i think the US dollar will not be replaced by the Euro in international transactions