Eurotrash?

Article Abstract:

The new European currency, the euro, was forecast to rise in relation to the US dollar, prior to its launch in Jan 1999, but instead it has dropped in value. The fall follows a previous rise, and the euro has not dropped below the value of component currencies a year previously. The rise in the US dollar is linked to US economic growth, and cyclical factors have led the euro to drop in value, rather than structural factors. Strong US economic growth and the strong US dollar will not last forever, and the US trade deficit and evenutal slowing of growth will lead to a drop in the value of the dollar.

Editorial, Analysis, United States economic conditions

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Flaming fringes

Article Abstract:

There are dangers of overheating in peripheral European economies, such as Ireland, which have joined European monetary union. Interest rates cannot be raised to dampen economic growth due to membership of monetary union. Rising house prices and shortages of skilled workers are affecting Ireland. Spain and Finland are also experiencing strong economic growth. Peripheral areas tend to be poorer than the core countries, France and Germany, so can catch up, though there are risks from possible overheating and inflation.

Ireland

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Decline, and fall, and fall

Article Abstract:

The euro has fallen in value due to a drop in German business confidence, while euro-area inflation has risen due to higher energy prices, which means that interest rates may be raised.

Germany

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