Is the Euro Over valued or the Sterling undervalued?

slycat

Right guys. Im trying to evaluate if the euro is presently overvalued or the sterling is undervalued. Im working with the big mac index at the moment but wondering if ye have any ideas on this?

TheLedge

Not much of an economist myself, but I think Euro is slightly overvalued.

i'd like to hear what others have to say on this, and what they predict for future currency tends into the coming months.

Danno

I think that the sterling is OVER valued IMO!

mike65

This is a dollar story rather than being anything to do with Sterling. The value of the dollar has tumbled taking Sterling with it in respect to the euro. While at the same time Sterling has gained against the dollar. (its about 1.90/1).

Mike.

EKRIUQ

I don't think the Euro is over valued against sterling because like it or not the they are our main trading partners and I can remember the curency crisis in the early nineties when the old Irish pound was on a par with sterling, exporters were really feeling the pinch trying to compete. As for the dollar being so strong it may effect the american mutinationals when there cost basing Ireland as a setup country.

segadreamcast

Euro is finally stabilising to roughly the level it should be at.

U.S. dollar happens to be a bit too weak at the moment though - so the Euro is pulling too far ahead.

Euro - sterling rate is roughly where it should be.

Victor

Sterling is a petro-currency when oil goes up, petro-currencies go down (the dollar being the extreme case).

Oil is over-priced. Petro-currencies are under-priced. The Euro is over-priced.

In the short term it can go either way, we don't know if things are bottoming out or not or whether there is another big drop to go. Medium-term there must be some correction, but again I don't know about long term.

Victor

It just became overvalued.

Euro slips after Trichet remarks
(16:09) European Central Bank president Jean-Claude Trichet has raised the possibility of intervention in currency markets.

http://home.eircom.net/content/irelandcom/topstories/4558428?view=Eircomnet
http://www.rte.ie/business/2004/1202/ecb2.html
http://www.rte.ie/business/2004/1202/oil.html
http://www.rte.ie/business/2004/1202/ecb.html

Victor

Maybe not, looks like the Bush administration really is desparate.

US jobs data send dollar to new low
http://www.rte.ie/business/2004/1203/us.html

Henry McConville

slycat wrote: »

Right guys. Im trying to evaluate if the euro is presently overvalued or the sterling is undervalued. Im working with the big mac index at the moment but wondering if ye have any ideas on this?

In my opinion the Euro the euro is rather over valued at this moment in time...

RoadKillTs

In my opinion the Euro the euro is rather over valued at this moment in time...

Good man Henry

Axwell

Henry McConville wrote: »

In my opinion the Euro the euro is rather over valued at this moment in time...

Only took you about 5 years to come up with your decision and post it..good man!

Henry McConville

Axwell wrote: »

Only took you about 5 years to come up with your decision and post it..good man!

I think your sarcasm detector is broken my friend

Seriously, it is easy to jump from this arithmetic to the conclusion that the euro is overvalued, and that it is likely to continue the decline that began last December. But that conclusion would be wrong. Looking ahead, the euro is more likely to climb back to the $1.60 level that it reached in 2008.

CompanyBureau

[QUOTE Looking ahead, the euro is more likely to climb back to the $1.60 level that it reached in 2008.[/QUOTE]

You think??? I'm no expert, but IMO the euro is worth around $1.25.