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The real Euro vs Dollar exchange rate…

UPDATE: 2008 August: finally regaining strength as Europe economy is losing strength… $1.47 (Sept: $1.37)
UPDATE: 2008 May:  okay the $ dropped even further… It’s now at $1.57.
 
To track in Vista Sidebar: add ticker /USDEUR (or /EURUSD) in Stocks gadget.
 
The dollar lost considerably against the Euro over the last 5 years. Is it justified? Perhaps looking at the trade deficit and subprime mess but what’s the real buying value? Here are some random comparisons at $1.45:
 

Category

$

(no sales tax)

Euro at $1.45 

(excl sales tax)

Diff in $

Diff in %

Car midsize Passat Comfort

27000*

38750

11750

30%

Electronics Sanyo HD Projector Z2000**

2400

3300

1100

33%

Electronics Canon G9***

440

530

90

17%

DVD Shrek Third***

15

18

3

17%

* full msrp. Typically you can negotiate easily extra discount (see edmunds.com for ‘fair market value’)
** Excluding $300 mail-in rebate by Sanyo (which is probably only available in the US).
*** Amazon.com vs Amazon.de. By the way I just ordered the G9 at bhphotovideo.com. Will post some pictures when I get it.

I do think it’s fair to say that the dollar is really about 25% undervalued which is great news for Europeans going on vacation in the US (not so good for me:-().

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