International Sales News - As Seen on TV Products

International news, issues, and trends for innovative consumer products in the direct response television industry (DRTV), as well as tips for export management & international product sales. This blog focuses on the As Seen on TV product category.

Wednesday, April 16, 2008

The Dollar's New Low is the Euro's New High

Today the euro reached a new high against the dollar following a revision of EU inflation rates. The rate was revised higher, as the harmonized index of consumer prices from 3.5% to 3.6%. This comes as an unanticipated record high in the inflation rate growth for the euro.

The rise prompted the euro to hit $1.5966 leaving the question of when it will break $1.6, on the horizon, and what will happen when it does. Inflation data out of the US will be what to watch for today, and if comes out lower than is expected the euro very well may reach $1.6. Traders are expecting central banks to intervene if this occurs. The strengthening of the euro was not just demonstrated against the dollar but also hit a new high against the pound.

So why does the euro continue to prosper? One reason is the expectations of lowering rates by as much as half a point by the Fed, which means that the European Central Bank may be able to maintain its rates for the remainder of the year therefore making the dollar less attractive to investors.

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