Comment by marcosdumay
2 months ago
> It's more along the lines of "if the EUR goes to 1.5, what does this do to eurozone economies?" and the answer to that isn't pretty for europe.
If all the prices rise in the US to compensate, Europe stays exactly as competitive as before.
> And finally, remember: the US actually exports inflation
You are blowing the horn yelling that this just stopped. Or what do you think a dollar devaluation is?
> If all the prices rise in the US to compensate, Europe stays exactly as competitive as before.
Yes, but my point is exactly the opposite has occurred for imports: the US is still roughly flat in terms of import inflation. Since Nov '22, import inflation has been sub-3% without exception and sub-2% since 2023 without exception. The US is still exporting inflation effectively, and US inflation is due to factors other than currency fluctuations.
That's the real issue: the USD weakened 8% against the EUR, and prices remain the same. For eurozone exporters to the US that's an absolute disaster.