| Pages in topic: < [1 2 3 4] > | How to protect against the end of the Euro? Thread poster: Günter Dannhauer
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opolt 
Germany
Local time: 13:49
English to German
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| Reports of the death of the € are greatly exaggerated | Dec 7, 2011 |
I admit that as a German (living in Germany) I may be heavily biased here ... but so will be the opinion of our dear readers in the US and in other parts of the English speaking world to some degree, because it has become obvious that there are vested interests which are betting against the Euro, and press reports often reflect these interests, not least because most of the currency trading is performed on ... markets in English speaking countries ...
The AUD may have gone up agains... See more I admit that as a German (living in Germany) I may be heavily biased here ... but so will be the opinion of our dear readers in the US and in other parts of the English speaking world to some degree, because it has become obvious that there are vested interests which are betting against the Euro, and press reports often reflect these interests, not least because most of the currency trading is performed on ... markets in English speaking countries ...
The AUD may have gone up against the €, but that's really an Aussie thing (mainly due to Australia's raw material exports to China and elsewhere I believe), and if you look at the charts, the Euro, after many months of crisis, is still heavily overvalued, i.e. it's still at least 15% above what was once considered USD parity. I has been very much above that parity uninterruptedly since 2004 or so -- so you could easily talk about a USD crisis here, or at least wonder about the state of the US economy. And still the € represents more than 20% of the entire world's currency reserves. So where will all those people take their money after the € breaks down? There aren't that many alternatives.
Nothing can be excluded of course. What we are seeing right now is an ugly picture -- though other economies are far from healthy (with very, very few exeptions -- very small countries for the most part). But in general I think that we as "small shop" owners won't be able to protect against such an event in any case. If the Euro comes down, it'll take with it many, many other dominoes in far away lands. ▲ Collapse
| | | | Williamson
United Kingdom
Local time: 12:49
Flemish to English
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| Needless panic | Dec 7, 2011 |
I have been following the rate of the euro for the past three years. The weird thing is that in winter the euro went down and in summer went up (to about maximum $1.47 for a euro/in 2010 and $1.41 for one euro, in winter it went down to 1.35 in 2010 and 1.33 now).
The euro is not going to dissapear yet. Imagine what that would mean in terms of logistics and legislation. Not only is the euro a legal tender in 17 countries, including the Vatican, it is also a reserve currency in man... See more I have been following the rate of the euro for the past three years. The weird thing is that in winter the euro went down and in summer went up (to about maximum $1.47 for a euro/in 2010 and $1.41 for one euro, in winter it went down to 1.35 in 2010 and 1.33 now).
The euro is not going to dissapear yet. Imagine what that would mean in terms of logistics and legislation. Not only is the euro a legal tender in 17 countries, including the Vatican, it is also a reserve currency in many others.
[Edited at 2011-12-07 11:36 GMT] ▲ Collapse
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Someone's been reading the British tabloids too much.
| | | | | Some posibilities | Dec 7, 2011 |
If the price of the Euro falls, you have some possibilities:
a) You ask to be paid in australian dollars (or whatever other more stable currency).
b) You raise your prices for the clients paying in euro.
c) You do nothing.
If you choose c, you end with less money, at least till the euro price rises again.
If you choose a or b, you become less competitive compared with colleagues based in Europe or colleagues choosing c. Whether you then lose money or not dep... See more If the price of the Euro falls, you have some possibilities:
a) You ask to be paid in australian dollars (or whatever other more stable currency).
b) You raise your prices for the clients paying in euro.
c) You do nothing.
If you choose c, you end with less money, at least till the euro price rises again.
If you choose a or b, you become less competitive compared with colleagues based in Europe or colleagues choosing c. Whether you then lose money or not depends then on whether the demand for your services is such that you are still fully booked.
There is also
d) You try to gain more clients based outside the euro-zone. This is in my opinion quite difficult and also risky, since the inertia of the client base is, I believe, too high to follow the changes in the currency exchange rates.
I do not see any other possibility. This is unfortunately a risk inherent in our business. ▲ Collapse
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neilmac
Spain
Local time: 13:49
Spanish to English
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Günter Dannhauer wrote:
Now there is the additional danger that the Euro might crash within days or months. Sydney
The imminent collapse of the euro is in my opinion largely wishful thinking and has been going on for years in certain quarters.
I lay the blame to a great extent on the likes of Standard and Poors, a USA-based financial concern with a vested interest in people panicking and abandoning the euro. If they would just give us some respite from their scaremongering, we Europeans might actually manage to sort out the mess of the current crisis, which - unless I'm mistaken - was sparked off across the pond by those folksy double-barrelled-name subprime mortgage lenders.
O ye of little faith!
[Edited at 2011-12-07 18:01 GMT]
| | | | Kirsten Bodart
United Kingdom
Local time: 13:49
Dutch to English
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| If it were going to go out of business, | Dec 7, 2011 |
you'd know, for sure. It takes such a long time to print enough money, that they would have to start well in advance doing it. Consider, if Germany were printing new Deutsch Marks, just take their population of 85 million people and say give each of those people one note and one coin of each, they would have to print at least 85 million pieces of each thing. And that does not include safes, reserves, circulation money, people who stuff their mattrasses (:D) etc. So I don't think tomorrow Germany... See more you'd know, for sure. It takes such a long time to print enough money, that they would have to start well in advance doing it. Consider, if Germany were printing new Deutsch Marks, just take their population of 85 million people and say give each of those people one note and one coin of each, they would have to print at least 85 million pieces of each thing. And that does not include safes, reserves, circulation money, people who stuff their mattrasses (:D) etc. So I don't think tomorrow Germany is going to say, 'The hell with it.' They would have no money to go around. They would have to go back to the beach and find shells to exchange . Look at how long the real introduction of the euro itself lasted...
The more you tell investors and such that someting is collapsing of course, the more panick will ensue (Dumas already knew that). If everyone, including the BBC, would just stop talking about it possibly we would get out of this more easily.
I mean, we are not yet in the same state as the Polish Zloty was in before they scrapped all the 0s... That's when you have to get worried.
I am worried though, if Germany were to take back its Mark that I would be living in a country wher the currency is worth much more than the currencies around it, but then I'll have enough time t figure something out... ▲ Collapse
| | | | Thayenga
Germany
Local time: 13:49
Member (2009)
English to German
+ ...
| Gain and loss due to currency diviations | Dec 7, 2011 |
Jenn Mercer wrote:
I don't think the Euro is going to crash completely, but I am concerned with the direction the Euro is heading. As it stands, I have a large invoice in Euros due at the end of the year, but no idea how much it will be worth in USDs once it is paid.
When dealing with international markets, it's hard to predict how much your invoiced dated, let's say, a month ago will actually bring you.
Invoicing in USD has brought me both moderate gains as well as moderate losses this year. IMO this is the case with most major currencies in these unstable economic/financial times.
That the Euro is doomed to crash to an all time low, or even cease to exist altogether, is rather unlikely, unless more countries with weak economies are compelled (no incorrect choice of term here) into the Euro-Zone. In fact, there is a sound chance that the Euro will gain in stability as soon as/provided that the European countries can establish a solid EU finance politcs.
That#s my 2 (€) cents.
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Alistair Ian Spearing Ortiz wrote:
Someone's been reading the British tabloids too much.
this ^^^^^
Or maybe Australian tabloids? Are there any?
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Samuel Murray
Netherlands
Local time: 13:49
Member (2006)
English to Afrikaans
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| End of euro won't affect exchange rates | Dec 7, 2011 |
Günter Dannhauer wrote:
I live and work in Australia, and I get many job from Europe. ... with the Euro going down since 2009. Now there is the additional danger that the Euro might crash within days or months.
I think the demise of the euro will not affect exchange rates with the new currencies. The current euro crisis has been going on for a couple of months already and it hasn't really affected the exchange rates. For example, the EUR/AUD rate has been roughly 1.3-1.4 for the past 12 months.
It is true that the EUR has lost quite a bit of ground against the AUD in the past 5 years, and if you had only done translations for the past 3 years, the drop might seem even more dramatic (since about 3 years ago the EUR suddenly strengthened against the AUD). Heck, three years ago there was 2 AUD in every EUR, and now there is only about 1.3 AUD in a EUR.
http://preview.tinyurl.com/7uafwhy
Over the same period, the USD/AUD rate has shown a similar pattern, although the USD went up a bit again about a year ago, before dropping back to the same pattern as the EUR.
http://preview.tinyurl.com/7nehaav
I think the main problem for you is that the AUD is strengthening against major currencies (also against the GBP, by the way). Your loss of income is not caused by the euro bomb but by your own country's finance ministry.
| | | | Richard Foulkes (X)
United Kingdom
Local time: 12:49
German to English
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Samuel Murray wrote:
I think the demise of the euro will not affect exchange rates with the new currencies.
Really? You think Greece and Germany would come out of the euro on an equal footing (i.e. the same rate at which they went in)? Or have I misunderstood you?
I would have thought the most likely change, if any, is Greece and maybe Italy and Spain leaving (or being pushed from) the euro. Their old/new currencies' valuation against the euro would surely be quite poor given that those economies are the ones dragging down the single currency. The euro would surely be much stronger without any or all of those (good news for UK translators invoicing in euros) and any strong economy that came out of the top (Germany) would surely come out of the euro at a stronger rate than those dropping out the other end?
Some might say I'm making a drachma out of a crisis (sorry) but I would have thought the currency changes would cause chaos for translators so not a bad idea to at least discuss some contingencies. If you think 0.01 USD / word is bad, wait for the offers of 0.01 lira!
[Edited at 2011-12-07 15:46 GMT]
[Edited at 2011-12-07 15:50 GMT]
| | | | | Biting socio-political comment? | Dec 7, 2011 |
Anna Spanoudaki-Thurm wrote:
Greetings from Greece!
And yet your location says Germany. Clearly there will come a point when Germany will just buy Greece and be done with it, but it hasn't happened yet, has it?
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buy it?
(I lead a nomadic life. )
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Krzysztof Kajetanowicz (X)
Poland
Local time: 13:49
English to Polish
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| re: "says who?" | Dec 7, 2011 |
12 of 26 Economists in Financial Times Survey See Probability of Eurozone Breakup at 20 to 30 Percent; What are the True Odds?
http://mpettis.com/2011/11/will-greece-unravel-by-christmas/
The original question, however, was more or less "what happens to euro receivables if the eurozone falls apart".
The euro is extremely unlikely to disappear altogether, in my opinion. A more likely scenario is that one or two (or more) countries leave the eurozone.
Theoretically this should be very damaging to the EUR/AUD exchange rate. However, a scenario like this is possibly already priced in - meaning: if investors are now predicting a partial decomposition of the eurozone and still they trade the EUR at whatever the going rate is, the exchange rate should not be sunk by the said event actually happening. Samuel has made a point about this.
On the other hand, some (but few) predict (sensibly, in my view) that the strongest countries, rather than the weakest, will leave the eurozone - say, Germany, the Netherlands, Austria and Finland. This is probably not priced in and could lead to a stronger fall in the price of the EUR (not to its disappearance, however). ▲ Collapse
| | | | Vanda Nissen
Australia
Local time: 21:49
Member (2008)
English to Russian
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| Australian dollar is very strong | Dec 7, 2011 |
Günter Dannhauer wrote:
I just compared to similar jobs. 2009 I had a 3000 Euro job and received 5700 AUD. A similar job today pays me 3900 AUD.
Yes, the problem is that both Euro and USD are really weak, and our dollar is very strong:(. I use my Swedish bank account for all Euro projects so I do not worry that much about Euro and its destiny but I am really looking forward to stronger European and US currencies:).
| | | | John Fossey
Canada
Local time: 07:49
Member (2008)
French to English
+ ...
| Exchange rate hedging | Dec 7, 2011 |
If you have foreign currency invoices due at a certain time in the future, you can purchase a foreign exchange hedge, by which you agree to purchase local currency in exchange for foreign currency at an agreed on rate and on an agreed future date. It's only worth doing if the amount is at least several thousand dollars or Euros, but it is a practical way to protect yourself.
When there is a perceived risk in the future there will be a higher cost, of course.
Contact ... See more If you have foreign currency invoices due at a certain time in the future, you can purchase a foreign exchange hedge, by which you agree to purchase local currency in exchange for foreign currency at an agreed on rate and on an agreed future date. It's only worth doing if the amount is at least several thousand dollars or Euros, but it is a practical way to protect yourself.
When there is a perceived risk in the future there will be a higher cost, of course.
Contact a professional currency trader - most major banks should be able to arrange it. ▲ Collapse
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