After the euro reached a historic mark of $1.60 last week, analysts have begun to speculate about its future behavior.
An analysis made by Bloomberg, one of the most important providers of world economic information, states that the euro will begin to depreciate in the third trimester of 2008.
One of the main factors is the recent behavior of the euro in the last months, showing a strong tendency to climb in value. You must also take into consideration that the European market has shown a healthy and stable climb, with a growth of 3.1% in the first trimester and an unemployment rate of 6.9%
With all these factors you may now add the depreciation of the dollar and the high prices of oil which have not shown any change in decrease in the recent months leading up to this week. Knowing that in this market absolutely nothing is for sure, but some economist believe that the euro will remain above $1.50 for a decent period of time and in the mean time the cost of oil will be over $110 a barrel.
The problem could be heightened with companies that register most of their sales to foreign countries. They might begin to see their goods and services have a much greater level of competiveness in the countries that use the dollar. A high appreciation of the euro against the dollar imposes a threat to the European businesses and a threat to the economy.