Posts
http://money.cnn.com/2010/05/11/markets/thebuzz/index.htm
Above is an interesting article about how the downturn of the Euro is affecting American companies such as Priceline. Even as the dollar is rising in value compared to the Euro do you think that the Euro's plunge will have a great effect on Corporations or is this just a temporary shock because of the bailouts?
Subscribe to:
Post Comments (Atom)
In an increasingly gloabl economy multinational companies are always putting themselves at risk with currency depreciation. Two years ago Europe and countries all over the world were upset by the depreciation of the dollar and the sudden halt in American consumption. Now, Europe is in a similar position and many companies are going to suffer, which is unfortunate after things are finally starting to turn around in the United States. My biggest concern is that investors will begin to lose confidence in Europe and the situation will become even worse. I wonder if Europe is too big to fail?
ReplyDeleteI think this could be a temporary shock because of the Greek bailout and the Iceland volcano. The Euro shouldn't struggle this mightily and drop this quickly over the long haul. I think this is a short term spike downward. Unfortunately, the Euro could be in trouble long term if confidence in it from countries like Germany France begin to waver.
ReplyDeleteI also think that this is a temporary shock. The article focuses on Price-line as a company which was obviously hurt by the Iceland volcano along with several other travel and vacation related companies in America. Now that travel has resumed and the Euro is cheaper you may see people vacationing to Europe to take advantage of this, but you will most likely not see the Euro plunge any farther. Once the Greek bailout is said and done the currency will stabilize again.
ReplyDeleteI agree with the volcano and Greek bailout causing the recent shock; most likely it'll be temporary. And this is very reminiscent of when the dollar was declining in value, and the euro was strong--only now it's the opposite. We came out of it, and I believe Europe will too soon enough. The thing that I was most shocked by was that McDonald's earned 40% of its revenue from Europe. I had always though Europeans were extremely against fast food, McDonald's in particular. I wonder why/how they've changed their thinking. Maybe we're making other countries more like us than we really think...
ReplyDeleteOverall I see the Euro continuing to deteriorate in the future and I see that as being good for the U.S. These defaults are not the end of Eurozone countries running into problems. Yes, this will hurt US exports but let's face it - we are not going to pull ourselves out of the recession by suddenly turning into an exporter. I think it is far more possible that we could end up benefiting from a weak Euro in the form of increased U.S. consumer spending.
ReplyDelete