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  • 1 Dollar Could Soon Be 1 Euro

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    Marcela Maciel
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    The US dollar has strengthened against the euro since Donald Trump's election, pushing the currencies towards parity, where $1 would equal €1, for the first time since 2002. The divergence in monetary policy between the US Federal Reserve raising rates and the European Central Bank keeping rates low is driving the movement in the currencies. If parity is reached, it would make European exports cheaper for Americans and benefit European exporters.

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    1 dollar could soon be 1 euro

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    The US dollar has strengthened against the euro since Donald Trump's election, pushing the currencies towards parity, where $1 would equal €1, for the first time since 2002. The divergence in monetary policy between the US Federal Reserve raising rates and the European Central Bank keeping rates low is driving the movement in the currencies. If parity is reached, it would make European exports cheaper for Americans and benefit European exporters.

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    © All Rights Reserved
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    7 views3 pages

    1 Dollar Could Soon Be 1 Euro

    Uploaded by

    Marcela Maciel
    The US dollar has strengthened against the euro since Donald Trump's election, pushing the currencies towards parity, where $1 would equal €1, for the first time since 2002. The divergence in monetary policy between the US Federal Reserve raising rates and the European Central Bank keeping rates low is driving the movement in the currencies. If parity is reached, it would make European exports cheaper for Americans and benefit European exporters.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 3

    $1 could soon be worth €1

    Before Starting Slater said the currency moves are now


    being driven by divergent monetary
    A. What do we think of the EU Economy policies on either side of the Atlantic
    in the last 5 years? Ocean.
    B. Do we think interest rates should go
    up?
    The U.S. Federal Reserve is raising
    C. How do you think it would affect
    interest rates as it sees the American
    Europe?
    economy improve and expects rising
    prices. Meanwhile, the European Central
    New Vocabulary Bank has extended its stimulus program
    and kept interest rates at record lows to
    Divergent Flip side of the coin support the economy and boost inflation.
    Monetary Inflationary Investors are attracted to higher interest
    Stimulus Hiking (Rates) rates and stronger economies because
    Parity President-elect they expect a better return on their money,
    Slash (Taxes) psychological which has pushed up the dollar. Europe is
    essentially the flip side of the coin.

    Article
    President-elect Trump is also playing
    heavily into the currency equation because
    The U.S. dollar has been powering higher he's promised to slash taxes and
    since Donald Trump won the presidential regulations and support infrastructure
    election and the euro has been weakening, projects. His policies could create an
    putting the two currencies on a collision inflationary environment where the Federal
    course. Reserve will have to keep hiking interest
    rates to keep inflation at bay.
    The dollar's 9% move since Election Day
    means it's now worth €0.96. That's its The major shift in these currencies is
    highest level since 2003. making European products and travel
    cheaper for Americans. European
    The trend has led to predictions of parity -- exporters, including German auto
    that is, when $1 is worth €1. The last time manufacturers, are expected to benefit.
    that happened was 2002.
    Germany ships over $125 billion worth of
    Adam Slater, the head economist at goods to the U.S. annually, making it one
    Oxford Economics, said Thursday that of America's biggest trading partners.
    parity could be reached by the end of
    2017. Other economists think the key
    psychological level will be reached even
    sooner.
    Debate

    A. What do you think of the article?


    B. Do you think its time Europe increases
    its interest rates?
    C. What do you know about the European
    Central Bank?
    D. What do you think of the European
    Central Bank?
    E. Do you think it is a good think if the
    dollar becomes equal to the euro?
    F. Why/why not?
    G. Do you invest in currencies? Have you
    ever thought about investing in
    currency?
    H. How do you think Trump will boost the
    economy in America?
    I. How do you feel about the American
    economy?
    J. What changes would you make to the
    European economy?
    K. Do you think Germany makes most the
    decisions in Europe?
    L. Is inflation a good thing?

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