The US Economy and the Euro-Dollar Parity.
Table of Contents
Table of Contents 1
Introduction 2
Discussion and Analysis of Research Findings 3
I) US Citizens and weak US Dollar. 3
II. US Companies and weak US Dollar. 4
III. US Economy and weak US Dollar. 5
Conclusion 7
Bibliography 8
Introduction
Tuesday July 15, the dollar hit a new low record against the euro, which peaked at $1.6038. Markets are worrying about the US economy. The reason of such a plunge for the US Dollar is the announcement made by the Federal Reserve Chairman to the Congress. Ben Bernanke explained that despite the Fed's aggressive interest rate reductions started one year ago, the US economy was facing "numerous difficulties”.
Euro was launched ten years ago. On December 31, 2008, the parity was set at 1 Euro for 1.665 dollars. Euro hit its lowest point in 2000 with 1 Euro for 0.8230 dollars on October 26. Since then, a long trend of appreciation appears with the Euro strengthening more and more against the dollar.
Such a trend had, and still has a big impact on the US economy. The purpose of this paper is to analyze the consequences on the US economy of a weak dollar against the euro. We will use a bottom-up approach. In the first part, we are going to review the impact of the weak dollar for US citizen. Then, we will analyze what are the consequences for US companies. To finish, we are going to examine the effect of a we ...