Is The Euro On A Downward Spiral Now Against The US Dollar?

such as this one – you would know that people are thinking the Euro has done the best it can this year. 

But what is interesting about these stories is that they are predicting worse to come.  It is not actually happening at the moment.  But are there signs that this could be the very start of a downward slide for the Euro?

Let’s go back to the beginning of June to see what has happened against this currency.  If you keep track in the future of the exchange rates on your currency converter, you will start to see whether or not the stories are coming true.

So where were we on the 1st June?  Or more precisely, how was the Euro doing against the US dollar?  Back then it was on 1.4220 at the end of the day.  There were some interesting dips to come though as it made it down to 1.4177 by the end of that week.  And as if that wasn’t bad enough the following Monday started with a drop to 1.3866.

If we are thinking about potential bad times ahead for the Euro, it looks as if it has been through some already!  It pulled itself up by the bootstraps though and finished up on 1.4004 by the close of that week.

But once again Monday didn’t prove to be the best day of the week for the Euro.  The dollar pounded back at it again, leaving it on 1.3850 at the close of play.  And as the rest of June played out, we saw figures such as 1.3932 on the 19th and 1.3940 on the 25th too.

The Euro finished the month rather more strongly on a rate of 1.4134, but there was still plenty of work to do.  And before we knew it, the Euro was back down to 1.3897 on the 6th of July.  That week finished on 1.3901, so clearly the US dollar had something to say about the Euro’s repeated attempts to get a decent foothold against it.

The following week ended on a more positive note on 1.4090, and the currency launched itself into August with a rate of 1.4138 under its belt.  Indeed things got even better to kick off the month, as it managed to climb up to 1.4303 on the 3rd.

So far the Euro hasn’t displayed many signs of dipping remarkably against the US dollar.  But what we have seen is a constant struggle to get ahead against the American currency – and it hasn’t been able to do so.  Every time the back door has been left open to tempt the Euro in, it has reached it only to have the door slammed shut in its face.

The Euro hasn’t given up yet though.  On the very next day it managed to climb back to 1.4384, giving it hope that it might just perform better in the coming days.  It even managed to reach 1.4410 on the 5th, but since it got to that point it relinquished it again the following day, sliding back to 1.4370.

And perhaps this was the turning point.  At the time of writing, the Euro has yet to regain the $1.44 territory that it crept into on the 5th.  That week ended up dropping a little further for the Euro to 1.4357, and the last day of trading as we wrote this report came back with a lower figure of 1.4202.  Perhaps that last figure was the most telling one of all.  It signified the Euro had lost out on 1.080% since the previous trading day.  It may not sound like much but it made enough of a difference.

So what figures would we be seeing next month if we were to follow this report through?  Would we see lower figures still for the Euro?  Would the speculation and reports turn out to be true as we watch the Euro get weaker against the US dollar – possible for the remainder of 2009?

We will have no answers until we watch the drama play out of course.  But it shall be interesting to see whether the reports on Bloomberg and other sites have got it right.

We have seen plenty of ups and downs in the currency markets this year.  The recession has played its own part in that too.  Perhaps we will now see more downs than ups for the Euro.