I will consider this further and come back to you soon. Meantime, the mainstay of the Euro is Germany and the former Dm (forget the former Franc and Lira). With Euro area growth slightly negative QonQ, and with the German internal deficit (ie: fiscal deficit) above the 3.5% ECB benchmark, and with France still in a state of disarray, I would argue that US$ would be within 10% of its current benchmark, if all trading was done in Euros. If, however, Sterling was included in the Euro, then I would argue that the differential could be as great as 15-25%.
Interesting to see that Sweden votes next week on joining the Euro (with business favouring joining, but not the Government). If Sweden goes yes, then that will be good for many of its industries (particularly those exporting beyond the Euro bloc). It will also likely result in Denmark following suit and joining the Euro next year. But, if the vote is no, then the Nordic economies could well languish.
The collective might of the Euro is good as an emerging 2nd global currency, but that does not mean that it will ever attain the same dominance as what the US$ has. Even more so, for as long as the Sterling remains outside of the fold.
