Question:Dollar now only .7281 to 1 euro - What does this mean, warnings about dropping under 80

I am not very well informed on the way the currency range rate plays into the market & the implication of a very low dollar on the
financial stability of our markets. My father told me the only people this is good for is investors & corporations. I can
well believe, but due to the very low value of the dollar on the euro - what does that mean? A crash?

Any information would be appreciated. This is not my area of expertise. Thanks all.

Or, €1 = $1.3734.

It means that there is so much US money out there and people have so little faith in the inheirant power of our currency (9 trillion dollar debt, anybone?) that it's worth is going down. Which means you will need more US dollars to buy commodities like oil and copper and steel.

Also, since workers makes wages, then the euro value of the work that goes into making, say, a machine tool goes down when the dollar does, so US goods become cheaper.

Unfortunately, we don't make goods anymore. We make services. So now it's cheaper to make those Big Macs and sell those Chinese-made TV sets.

cheaper exports were always the prop but the prop was removed when you exported manufacturing to China wherever.

I will give the video a look.

US dollar now days?

https://secure.reuters.com/news/articleinvesting.aspx?type=marketsNews&storyID=2007-07-17T200215Z_01_N17244401_RTRIDST_0_DOLLAR-EARNINGS.XML

CHICAGO, July 17 (Reuters) - The U.S. dollar is grinding steadily lower and Corporate America couldn't be happier.

The currency's slide is delivering a generous boost to sales and earnings for many U.S. companies, a trend most analysts see continuing through the year.

Those deriving the greatest benefit generate a significant portion of business beyond U.S. borders, where the weak greenback makes their goods cheaper to foreign buyers and profits generated in those markets are amplified when translated back into dollars.

It's more complicated than what your father said. The decline in the dollar relative to the euro is bad news for Americans who buy goods or services that are sold in euro-denominated prices. American tourists in Europe are finding higher costs than they expected. A meal that once cost 20 euros still costs 20 euros, but the American has to come up with more dollars to get that many euros, so the effective price is higher. The shift is also bad news for Europeans selling to Americans. The restaurant will see fewer American customers because of the effective price increase. If the restaurant had raised its prices, it would at least have more revenue per customer to compensate for the decline in business, but the restaurant owner gets no benefit from the "higher" price when it occurs because of currency fluctuations. The restaurant still gets only 20 euros per meal and has to pay its expenses in euros.

The flip side is that the change is beneficial to Europeans who buy and Americans who sell. Europeans vacationing in the U.S. will find that effective prices (to them) are lower, so they'll buy more stuff. They'll spend more dollars here.

Of course, tourism is less important than trade in goods. U.S. factory workers will be more likely to be hired (or less likely to be laid off) because the stuff they make is now easier to sell in Europe. U.S. consumers, on the other hand, can expect to pay higher prices for goods imported from Europe.

The shift doesn't portend a crash, but the increase in the prices of some imported goods will contribute to inflationary pressure.