Investing on the dollar?
After the sub prime crisis, the dollar has depreciated further, encouraging all residents in the euro area for some time designing a nice trip to the U.S. or an investment property in stars and stripes. A leap ahead of the euro on the one hand, restrain exports of European products (especially the Italian fashion brands) and the other, makes it more convenient direct purchases in dollars (raw materials, etc…)
At this stage of change, in which the world economy is looking for new settlement and avoids the risk of recession, it could prove advantageous to buy dollars, bonds and investment in U.S. real estate securities Americans clearly favorable for Europeans which, thanks to the strong euro may face any financial plan aimed at U.S. travel by investment through international circuits and means of payment accepted and accredited in the U.S. as American Express and Visa.
Thanks to this favorable exchange rate, the euro is taking on the position of dominant currency in the economic world and also achieving / exceeding the euro-dollar threshold to 1.50 represents a strong psychological impact affects the European economy as well as world, because the U.S. dollar for more than 40 years, has dominated global economic affairs, deeply affecting, while on the contrary, the task was far above the ECB to maintain price stability in the Euro Zone, preventing inflation from grow beyond the limits.
Even if you think the U.S. economy and hardships to move closer to a recession, forcing the Federal Reserve to lower interest rates further, using the strategy of the weak exchange rate to deal with this phase of difficulty ‘economic, investors continue to point to a stable country like the United States.
Despite market expectations weighing on the value of American currency, the decline in the cost of the dollar makes American products cheap and especially Europeans, who are among the largest holders of cash, can avail themselves of the weak dollar and sub prime crisis to to travel to the U.S. to make real estate investments and buy U.S. bonds, thus giving new impetus to the American economy and the future rewards of their investments.
Source: Reuters, Federal Reserve Bank of Chicago