The Euro has been dropping quite a bit in relation to the U.S. dollar. As the debt crisis in Europe extends, faith in the Euro has faltered and many investors have switched to the U.S. dollar for safety. This has come to be even though the U.S. is facing problems of its own. With a growing national debt and high unemployment rates, the U.S. economy is in trouble itself. But thanks to its past record of stability and growth, investors have not lost faith in the greenback.
At its current level of 1.3950, the Euro is close to the lowest price it has been at in the last six months. The bottom doesn’t look like it will occur anytime soon, either. Many market analysts think that the Euro will drop down below 1.3000 over the course of the coming months. This is a realistic theory as Europe’s problems do not look like they will end anytime soon.
But is the dollar really the best place to store your wealth? This is debatable. When there is a market crisis in one continent, all others are affected as well. The U.S. has certainly seen its shares of economic problems over the last couple years, but the dollar has a reputation that has largely protected it. The Euro is the currency of many nations in Europe and many of them are facing difficulties. On top of that, the Euro is relatively new as a formally recognized currency and does not have the solid reputation of the dollar. So when it comes to picking a currency, the dollar is a much better place than the Euro to store your assets.
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