According to Martin Feldstein the euro is not overvalued and a further downward slide is unlikely. On the contrary:
Moreover, global economic conditions require the euro zone to have a substantial trade and current-account deficit so that it becomes a large importer of funds from the rest of the world. Mostly because oil producing countries and China will continue to export more than they import, and because these surplus countries will diversify their investments away from the US and into the euro zone that provides the only large capital market other than the US for such investments.
Central banks in Asia and the Middle East will do the same with their foreign-exchange holdings, and this will inevitably cause the euro to rise relative to the dollar.
My comment: Feldstein’s argument really is about who should bear the burden of the realignment of the dollar-yuan exchange rate. The Chinese government is reluctant to revalue the yuan vis-à-vis the dollar, and if he does so he would not like to revalue at the same time its currency against its other major zone of exports, Europe. It follows also that the US would find it much easier to devalue the dollar both relative to the yuan and relative to the euro. In that way the effort required from China, and from the US, would be less and the euro zone, a global net exporter, would bear part of the burden.
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