Will the Euro Stop Dropping?

euro drops in value vs  US dollar

For US Travelers,  Europe is  a great DEAL!  For the last 10 years, I avoided countries that are on the Euro. Instead, I would go to Prague, Budapest and Croatia – it was always a better deal.  But now with the Euro dropping…..

A few years  ago  1  Euro =  $1.50. This week, 1 Euro  = $1.08

Analysts  say, The euro is going down because several of the key economies of Europe are heading into deflation, which is always a greater fear than average inflation.  European leaders are planning to apply quantitative easing strategies in March that will probably work to reverse the deflation but will likely not strengthen the euro relative to the dollar as QE increases the supply of euros.  The fact is that a weak euro will hurt the USA more than it will hurt Europe as it  impacts tourism from Europe and lowers the cost of imported products and services from Europe.

It’s a “Catch 22”  I guess; Americans are expected to  pour millions of dollars into the Old World as the value of goods and services decreases overseas.  But there is only so much money to go around…U.S. could  see a shortfall of tourists, which could wreak havoc on cities that depend on income from their vacations. Among those metropolises is New York City, which could experience a drop off of up to $30 billion in tourism dollars in the next year, or 50 percent of the current total, according to the New York Post.

Who knows?!