Euro rises above $1.20

Tourist Exchange rate for today: 1 USD ($) = 0.790 EURO (€)

So in reverse that's 1.2658 Euros to the US Dollar?

http://www.x-rates.com/



changes over the last 3 days

Nov 26 - Nov 29

EUR/USD +0.015 %
CAD/USD +0.603 %
JPY/USD +0.029 %
AUD/USD +0.650 %
GBP/USD +0.090 %
GBP/EUR +0.075 %
JPY/EUR +0.014 %
GBP/AUD -0.556 %
JPY/AUD -0.616 %

BTBG

NO, today it's 1.3248 US Dollar to 1 Euro.

That's correct, if you look at the stock exchange rate.

Bib, however, was referring to the Tourist Exchange Rate

Nov 29, 8:05 PM EST
Dollar Worries Send Dow to Close Down 46

By MICHAEL J. MARTINEZ
AP Business Writer

NEW YORK (AP) -- Stocks finished mixed in a volatile session Monday as investors worried that the continued fall of the U.S. dollar would spur inflation and hurt the overall economy. The concerns overshadowed a decent start to the holiday shopping season.

With the Federal Reserve meeting Dec. 14, many investors felt that the weakening dollar - which failed to gain much ground against other currencies Monday - would lead to substantially higher interest rates as the threat of inflation grows.

Wall Street also bid retail stocks lower despite improved sales for most retailers over the Thanksgiving weekend. A warning from Wal-Mart Stores Inc., which said its sales were lower than expected, led to selling across the sector. A strong showing in sales of electronics kept tech stocks slightly higher for the session.

"What we're seeing here is investors realizing that the falling dollar could prompt inflation, and that could prompt a much stronger Federal Reserve response," said Peter Cardillo, chief strategist, senior vice president and market analyst with S.W. Bach & Co.
The Dow Jones industrial average fell 46.33, or 0.44 percent, to 10,475.90. The Dow had been down more than 105 points earlier in the session.

Broader indexes were mixed. The Standard & Poor's 500 index was down 4.08, or 0.35 percent, at 1,178.57, and the Nasdaq composite index gained 4.90, or 0.23 percent, to 2,106.87.

Even stabilizing crude oil futures failed to assuage investors' concerns. A barrel of light crude settled at $49.76, up 32 cents, on the New York Mercantile Exchange.

Instead, Wall Street was focused on the dollar, prompted by Fed Chairman Alan Greenspan's warning earlier this month that foreign investors could reduce their U.S. bond holdings should the dollar remain weak. Greenspan blamed a spiraling trade deficit and continued federal budget deficits for international investors' reactions.
Some analysts, however, thought Greenspan's warning, instead of helping matters, prompted increased speculation in both currency and bond markets, with the dollar falling to record lows against the euro last week. That, in turn, spooked stock investors, said Joe Battipaglia, chief investment officer at Ryan Beck & Co.

"His statement didn't help whatsoever," Battipaglia said.

The selloff on Wall Street also was prompted by a drop in the government bond market, where there were fears of foreign bondholders abandoning Treasury bills as the dollar continues to weaken.

Ten-year treasury notes fell 71.875 cents to $99.34375, with the yield rising from 4.23 percent to 4.33 percent. At its next meeting, the Fed is widely expected to raise the benchmark interest rate by a quarter percentage point to 2.25 percent.

Many investors held out hope for better economic news this week, with a reading of the nation's gross domestic product coming Tuesday and the Labor Department's jobs creation report on Friday.

"This is a huge week from an economic release standpoint, and we'll have a lot of datapoints to get through before we'll be able to see if this rally we've had can continue," said Hans Olsen, managing director and chief investment officer at Bingham Legg Advisers. "If we see enough positives, we could have reason for cheer on Friday."

Wal-Mart's sales suffered because the discount retail giant offered fewer discounts than many of its competitors, and investors were not pleased with the results. Wal-Mart tumbled $2.17 to $53.15.

Other retailers fared better in holiday sales, but many remained under pressure due to Wal-Mart's report. Target Corp. slipped 31 cents to $51.90, J.C. Penney & Co. dropped 65 cents to $39.91, Sears Roebuck & Co. lost $1.88 to $52.42, and Kmart Holding Corp. fell $5.38 to $102.01.

Apple Computer Inc. surged $3.89, or 6.03 percent, to $68.44 after Merrill Lynch analysts said holiday sales of its iPod music player will give the computer and electronics company a strong boost. Merrill Lynch raised its price target on Apple to $77 from $66 per share.

IBM Corp. and Sony Corp. have collaborated on a new semiconductor specifically designed for home entertainment products, according to The Wall Street Journal. The two companies are reportedly ready to announce a limited production run for the chip, the newspaper said. IBM rose 78 cents to $95.50, while Sony gained 40 cents to $36.37.

Declining issues outnumbered advancers by nearly 5 to 4 on the New York Stock Exchange, where volume came to 1.79 billion shares, compared to 631 million in Friday's holiday-shortened session.

The Russell 2000 index of smaller companies was up 3.30, or 0.52 percent, at 634.46.

Overseas, Japan's Nikkei stock average rose 1.33 percent. In Europe, Britain's FTSE 100 closed up 0.18 percent, France's CAC-40 slipped 0.04 percent for the session, and Germany's DAX index fell 0.18 percent.

Kwityabitchin!!
The Aus dollar is worth about $1.65 or so against the Euro

Walter:
Re USD to Euro exchange Rate, what's the short to mid-term projections of the market analysts?

Well, today they say, the rise will stop it's "altitude flight" by now, and go back to "???".

I think, everyone is as surprised as I am that it crossed not only the 1.25 but the 1.30 line rather easily.
(I've bought by now all cd's I'm interested in - at 2/3 of the prize, I'd t pay here [even with the relatively high postage!].)

What's today's Tourist Exchange Rate for USD/Euro?

I don't think so. Macroeconomists have been predicting a moderate version of this for years, and their scenarios have become shriller as America's budget deficit has widened. A comparison of Paul Krugman's column on the subject from August 2001 with the one from October 2003 makes the point nicely. For what it's worth, Brad deLong, a macroeconomist at Berkeley, now guessesthat a serious drop in the dollar is imminent anytime in the next ten years, and that the dollar's value will stabilize at about two thirds of its present value when it's all over.

Thanks for the forecast, Thomas.

Thomas
If your prediction is correct what than effect do you expect it will have on the European economy

Depends on how fast it happens. If there's a panic and the dollar falls rapidly, Europe will drown in capital withdrawn from the US by panicky investors, which will boost its economy. If it happens slowly, the decrease in exports should slow down the European economies a little, but not catastrophically so.

But this is just a guess. I haven't really thought this part through.

Effect upon the European business community


FRANKFURT To get a sense of how fast the falling dollar can ruin a European businessman's day, talk to Udo Pfeiffer, the chief executive of a small German machinery maker in the industrial Ruhr Valley..
Pfeiffer's company, SMS Elotherm, builds machines that forge crankshafts for cars. He exports many to the United States and Mexico, selling for dollars to companies like DaimlerChrysler..
In recent weeks, the euro rose so rapidly against the dollar that Pfeiffer lost $10,000 in profit in the three days between shaking hands on a $1.5 million deal for a machine and signing the final contract. The profit margin on these machines, he said, is no more than $30,000..
As the euro climbs into uncharted territory - it hit a record of slightly more than $1.33 Wednesday- European exporters are voicing more and more fears about how it will affect business..
For every household name like Mercedes-Benz or Louis Vuitton, there are scores of much smaller outfits - making everything from crankshafts to concert pianos - which are being buffeted by a currency realignment that makes their products more expensive in the American market..
Some are even more dependent on the United States, and other dollar-dominated markets, than Mercedes of Germany or LVMH (Moët Hennessy Louis Vuitton) of France. And they do not have the financial resources of these very large companies to engage in complex currency hedging..
The distress in European industry is raising pressure on the European Central Bank to respond, either by intervening in the currency market to curb the rise of the euro, or by lowering interest rates. .
The bank's governing board meets here on Thursday, but it is expected to do neither..
"The dramatic fall of the last couple of months has really set off alarm bells," said Karl Kadar, a vice president at Standard Federal Bank in Troy, Michigan, who advises German automotive suppliers in the American market. "A lot of these are smaller, family-owned, private companies." .
Auto parts suppliers already had it rough. .
The price of steel - their basic raw material - has soared, thanks to skyrocketing demand in China. And their primary customers, the car-makers, have been squeezing them mercilessly for price cuts, as they struggle with their own poor sales..
.
"Volkswagen, DaimlerChrysler, and BMW are having big trouble selling cars in the U.S.," Pfeiffer said. "Their financial situation has worsened dramatically, so they put extra pressure on us." .
SMS Elotherm, with 280 workers and sales of less than €50 million, or $66 million, has little margin to absorb the shocks. .
It emerged from bankruptcy only 18 months ago. If the euro rises to $1.40 or $1.50 next year, which Pfeiffer said he expects it will, the company will have to cut its costs drastically, perhaps by moving jobs to Eastern Europe or China..
.
Many European exporters, even small ones, have built factories in the United States, mainly to be near their customers. .
These plants can serve as a natural hedge against the effects of a rising euro. .
But in some cases, the American operations are proving to be a burden..
.
Keiper, a maker of metal frames for automobile seats, built a plant in London, Canada, in 2001 to supply Chrysler. At the time, the company, which is based in the southwestern German city of Kaiserslautern, figured that the euro would trade at roughly parity against the dollar..
Now, Keiper has had to arrange hedges - transactions that are essentially bets on the future movements of exchange rates - to insulate it from the effects of a euro that trades at $1.33. Keiper was able to fix a rate of $1.25, which still means it is losing money at the current exchange rate..
"These companies have become very well-informed about influences and trends in the dollar-euro world," said Max Dietzsch-Doertenbach, a banker who advises the "mittelstand," or small and midsize, family-owned companies that are the bedrock of the German economy..
While Keiper assembles its seat frames in Canada, it still uses components that are exported from Germany. Like SMS Elotherm, it is being pressed by its customers to cut prices, even as its cost rise..
"It has had a severe impact on earnings," said Guido Schön, the head of foreign operations for Keiper, declining to give figures for the company, which is family-owned. "It is not easy to manage all the bad factors in the world," he added..
That sentiment would probably resonate with the 18 governors of the European Central Bank. They gather on Thursday to deliberate on interest rates. .
Exports, which have fueled Europe's fragile recovery to date, are losing steam, according to a survey by Reuters of purchasing managers. The index for new orders in the 12-nation "euro zone," a key measure of export strength, fell below 50 for the first time since July 2003..

BBC Business News reported last night that the Pound/USD rate was likely to hit £1=$2 by year's end. This was tied to the strengthening Euro also.

More bang for the buck for us Europeans.

Bibliophile the BibleGuru

That bang you speak of may be to the European economy. A cheap dollar may hurt the European economy more than that of the US.

Please elaborate, I'm interested in your insights.

Bibliophile the BibleGuru
The article I posted explains it better than I could hope to. However, simply put the European economy may price itself out of the market. Items purchased from abroad may be cheaper. As Walter said he got a good deal on CD's from the states because of the falling $. However, who will buy European produced products that are more expensive.
It will just exacerbate the fleeing of industry to lower cost areas. As for the US it should enhance our ability to sell to foreign markets. Just how much remains to be seen