Four years ago, when I first stayed in Germany, I was on top of the world financially, because the exchange rate was so good. One Euro traded for about eighty American cents (more accurately, two Deutschmarks traded for about a dollar -- the Mark's exchange rate had been pegged to the Euro, but the great switchover hadn't happened yet). Germans were carping about trading their strong and well-respected D-Mark for the forever-doomed-to-weakness Euro -- the idea of the Euro reaching parity (1 Euro = $1) seemed impossibly far off, if not laughable.
So let's flash forward to 2004 -- where, this morning, one Euro costs $1.28. When the idea of a second German trip first entered our minds, the Euro was nudging parity -- not long after, it broke through and has been climbing pretty steadily ever since. (And all the Germans bemoaning the weak Euro are now bemoaning the strong Euro.)
Unfortunately, the climb doesn't seem to be stopping anytime soon. Nor does our government want it to stop -- hoping, it seems, that President Bush can get some "it's the economy, stupid" bonus points in time for the election by pointing to a boost in U.S. exports.
We've not in trouble yet -- we've got quite a lot of headroom to go before that happens. Still, it's disconcerting when each trip you make to the ATM costs more than the trip you made before.
(Hopefully, at least, we'll see some of that short-term boost to US exporters show up in the other number that I watch obsessively ...)
Posted by at February 13, 2004 05:39 PM