Weak dollar, strong Euro - Germany

So the dollar is flirting with it's low point against the €uro. How is effecting you? My mom and sister were visiting here form the States and were set back when converting their dollars to €uros. I, on the other hand, had them bring over a load of shoes (size 14s aren't easy to find here) and other stuff as the €uro has so much buying power in the U.S.

Do any TTers receive their salaries in U.S. dollars ?

ITH: European shares hit by fears weak dollar will hurt exporters

I do, but converted to Euros. So i lose at the end.

Thank goodness for being paid in €€€'s and having an interest bearing account in £££'s. Helps for expeditures in the US!

time to start booking flights!

Probably going to the USA for a holiday soon.

One thing i really want some clarity from economists in this forum is how come high inflation in UK leads stronger Pound (2 USD) instead of a weak one? Theoretically, what should happen is inflation should match with an equal devaluation, as inflation means rize in the prices which means higher interest rates (as people would prefer consumption instead of investing with higher inflation). so everyone says it is bad for UK (they will not be able to export), etc etc but these guys have now huge favorability when they travel to Europe or US.

Maybe it will go down in the next month or two...Next month and when I get my last paycheck in June will probably be converted over...I guess I lose some money that is valuable shopping money right there...

How is it affecting me??? Kinda like getting kicked in the balls, thats how it is affecting me.

Damn the Republicans!!!

Sharpe, it's perspective.

People with GBP to spend can get more for their money by buying imported goods.
But people who own goods that need to be exported (whether manufactired or services) can sell less as their products become more expensive on the world market.

Quite well actually. As common sense dictates, I put a certain percentage of my portfolio in foreign assets. While all of it is doing well, that particular sector is booming.

And 9 years ago I put some into a dollar fund. Bad move.

And my company's shares are in dollars so those we bought have not only fallen in dollars but also further agains the pound/Euro.
*bangsheadonfloor

Oh, I have a DAX fund. Should I convert it to a mix of US stocks. I'm so bad at this stuff. My ex used to look into all this. Ugh.

But how is it affecting me? FANTASTIC since I am paying off my student loans. I earn Euros. Each month I need to send the equivalent of $550 to the U.S. Instead of taking the easy way out, I send as much as I can. These last few years, it's always a minimum of 600€. Usually, it's more than that though.

Not necessarily. Diversity is your best friend.

Yeah, but that does not explain my question on how hig inflation results in a stronger currency.

A strong currency is a result of "the market" having confidence in the prospect of that economy and/or higher interest rates which can be there to either attract inbound hot money and/or dampen domestic demand. The UK has quite high inflation I'd say when you include housing costs. But it isn't the case that low inflation equalls the best best economy.

The interest-rate-parity theorem states that the interest-rate differential must equal the expected depreciation/appreciation of the other currency. If an increase in inflation causes the central bank to increase interest-rates by more than the inflation increase and therefore more strongly than the inflation-induced expected depreciation, the currency will go up due to the higher real interest-rates offered in the country with the higher inflation. Something along those lines.