Statements that start with "It may vary depending on...", "I usually......", "That could roughly explain..." opens up your 70/30 rule to further interpretation.
Eur/usd
- Thread starter quin8670
- Start date
Then hush, and listen to him...
On the comment side, if you're attributing the euro's strength to the 10 new members joining the EU, you're wrong. The 10 together give what, about 2% of the EU's GDP? A blip in the German economy has far more consequence for the euro than cataclysmic events in all of the 10+2 new members. So if the Polish use euros instead of dollars in international trade, its still almost no news for the EUR/USD rate.
Second, all major Central European countries used some sort of peg system for their own currencies, usually a basket that was mostly DEM (50-70%) and about a third (30-15%) USD. Thus, not much of a change there either, except perhaps the denomination changed.
Cheap working force from Central Europe is also not the reason for the EU's relative strength. Actually the gigantic inflow of cheap Polish labor to Germany is absent to day, as there are less Polish and other new member state people trying to find job in Germany than before joining. If anything accession resulted in less labor flux, and German quotas for Central Europeans remain unfilled.
The euro got stronger because arab money started to abandon the dollar and invest in euro and in the EU economies that in the past few years were far more resilient than the US. (Still are.) The net inflow from Middle Eastern countries to the EU first exceeded those to the US after the introduction of the euro.
By way of discussion, how's life in Poland after accession?
Quote from orange_trad:
Then hush, and listen to him...
On the comment side, if you're attributing the euro's strength to the 10 new members joining the EU, you're wrong. The 10 together give what, about 2% of the EU's GDP? A blip in the German economy has far more consequence for the euro than cataclysmic events in all of the 10+2 new members. So if the Polish use euros instead of dollars in international trade, its still almost no news for the EUR/USD rate.
Second, all major Central European countries used some sort of peg system for their own currencies, usually a basket that was mostly DEM (50-70%) and about a third (30-15%) USD. Thus, not much of a change there either, except perhaps the denomination changed.
Cheap working force from Central Europe is also not the reason for the EU's relative strength. Actually the gigantic inflow of cheap Polish labor to Germany is absent to day, as there are less Polish and other new member state people trying to find job in Germany than before joining. If anything accession resulted in less labor flux, and German quotas for Central Europeans remain unfilled.
The euro got stronger because arab money started to abandon the dollar and invest in euro and in the EU economies that in the past few years were far more resilient than the US. (Still are.) The net inflow from Middle Eastern countries to the EU first exceeded those to the US after the introduction of the euro.
By way of discussion, how's life in Poland after accession?
You're probably right with the arabs. The chineese central bank influenced the $ by lowering their reserves of $ in favour to euros as well.
How is life after accession?? Here's the short version:
Since may 2004:
- GPD was up between 5-8% each year
- unemployment has dropped from 25% in 2004 to around 11% in 2007 (this is just "paper" unemployment. it's hard to find people to work)
- real estate prices up 150% just in 2006
- average wages up almost 100%
Not bad I must say, but other countries like the Czech repubic or Slovenia made use of the accession even better. Unfortunatley our politics are morons
