Exchange Rate Now!

Panic hits the air recently when the slide of US Dollar continued against the Euro, reaching a low of 1 Euro (EUR) = 1.4905 US Dollar (USD). Forex traders who bet against the US Dollar are now raking in big profits and the contrarians reeling from their Hugh losses.

The trend of US Dollar slide against the Euro has been widely fore-casted. This is not surprising, on the back of budget deficit in the US faced by the Obama administration as well as increased confidence in the global economy, prompting institutional investors to move out from the US Dollar reserves into assets, alternative currencies like the Euro and even commodities. Most forex traders are now betting against further depreciation of the the US Dollar.

The imminent depreciation in US Dollar further down the road is widely anticipated. It is unlikely that despite his eloquence, President Obama can talk his way into curbing government spending and the necessary reforms in health care and economy anytime soon. Countries that hold Hugh reserves in the US Dollar are now contemplating options if they should gradually move some of their reserves outside the US Dollar. For example, China holds roughly about US$1 trillion in foreign reserves. Should the China government decides one day that they will want to protect the value of their reserves and shift out of US Dollars and treasury, there will be an imminent collapse in US Dollar.

10 years ago, 1 Euro was trading at about 1.17 US Dollar. Compared to now, there has been a 30% increase in the value of the Euro against the US Dollar. This makes Europeans 30% richer than Americans over a 10 year span. This trend is highly likely to continue for the next 3 years. It is also likely that the Euro may trade against the US Dollar in the magical figure of 1 EUR = 2 USD within the next decade.

Tourist and foreign students intending to study in United States might want to consider converting some of their base currencies into US Dollar if there is a short term intention to visit the United States. Otherwise, with the likely trend that the US Dollar will further depreciate against major currencies like the Euro, there is no hurry for now.