It seems that whenever a country’s gross domestic product (GDP) grows, so does its currency. The Australian Dollar and Euro fall after December; but what causes the currency to move? In this article we will examine the reasons why the Australian Dollar and Euro fall after December. This will allow you to understand why you should purchase these currencies as opposed to the US Dollar or Euro when you plan to travel overseas. Additionally, you can learn the impact that a change in currency has on your bottom line profit.
Europe is one of the fastest-growing areas in the world today. Each European country has a different history and a different culture. For example, Portugal and Italy are often referred to as “God’s Own Country.” The Euro, which stands for the euro zone, is made up of 17 countries and includes Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. As you can see, there are numerous differences among these countries, and each one is a center for economic activity and political sway.
When comparing the economies of these various countries, you will see the euro becoming more like the Australian Dollar. This occurs because a central government is found in every one of the countries, which gives the currency a common basis for economic activity. With the tightening of monetary policy in Europe, there is pressure on all of the country’s central banks to keep interest rates low so that growth can continue to be driven upward. If interest rates are kept low, it is expected that more money will leave the country for other countries, resulting in a higher demand for the Euro as a whole. This is expected to cause the Euro to become more like the Australian Dollar over time.
In the past, the Euro was considered to be the “developed” currency, much like the Australian Dollar. However, it is now widely accepted throughout much of the world because it has higher purchasing power than the US dollar. This is especially true in Europe where money is usually much more mobile than in the US. Because of this, the Euro has become a common currency that is used much like the Australian Dollar.
The reason why the Euro has been rising against the dollar is because the European Union is expanding. Economists have predicted that there will be a massive rise in European interest rates once the union fully develops. Once this happens, there is a greater likelihood that European exports will become more competitive. As this happens, more people from Australia will want to convert their dollars into Euros so that they can purchase products in the Eurozone.
Right now, the euro has almost reached parity with the US dollar. If the Euro continues to rise against the dollar, many Australian consumers could end up paying more for imported items. This would greatly affect Australia’s economy, because the current unemployment rate in the country is above 7%. If the Australian dollar weakens versus the Euro, it will have a negative impact on Australia’s budget. In fact, many financial experts have predicted that a fall in the Australian dollar could lead to a recession in the country.
Right now, the Euro is far more likely to depreciate versus the US dollar. This means that a rise in the Euro can benefit the Eurozone countries that export goods to the US. For instance, Greece has stated that if the Euro continues to rise against the dollar, it will attract more European investors. However, there are also some European governments that do not see a benefit from the falling Euro. They claim that the Euro is too weak to help the EU’s economy.
There are several economic indicators out there that show whether a country’s currency would like or dislike falling versus a particular US dollar. One of the most reliable indicators is the Eurostat, which is similar to the FOMC. The Eurostat uses a special type of algorithm to determine these trends. If there is a significant decline in the Euro versus the US dollar, it usually indicates an imminent economic disaster in one of the EU countries.