The Economist article, “If the European economy is so shaky, why is the euro so strong?” by RA explains why and how the value of the euro still remains strong, even if the European economy is going through many difficulties. Throughout the article we discuss how the appreciation of a currency may not always represent a positive improvement and the negative consequences that the appreciation of a currency can bring. The article also states how exchange rate movements cannot be easily explained and provides further details on euro exchange rates. The article starts by stating that recently the eurozone has faced a good trend of improvement in terms of economy and management. to get out of the recession. In the eurozone, unemployment is falling and worries about the crisis are gradually disappearing. However, there is the fear of deflation. The article goes on to explain how the appreciation of a currency can cause very significant and serious problems. To better explain this point, an example of US cars is given in the article; If the US dollar appreciates against the euro or yen while the price of cars does not change, it will be more expensive for countries that use the euro or yen as their currency to purchase US cars. As a result of this appreciation in the value of the dollar, the number of cars exported will decrease in the United States. This is exactly the same reason why Europe fears a strong currency; the strong currency of the euro makes European goods and services more expensive for other nations and, therefore, reduces the quantity sold abroad. Furthermore, as families, businesses and the government are cutting back, the development and growth of the economy is highly dependent on paper products and services in demand around the world, hence the strength of the euro, at least as determined on the “demand” side of the equation. The “supply” side of the equation would imply to what extent the European Central Bank is pushing credit expansion, which tends to push the value of the euro down. Besides that, the article uses some expressions that don't sound very correct when thinking about a large economy like Europe; for example, at the end of the article it says that “The surest way to reduce it is to earn more euros”. The European system certainly has slow and difficult to predict response times, many variables and its behavior is decidedly non-linear. Therefore, using such a simple and direct expression regarding the euro exchange rate may not be the right thing to do, although to some extent it is a correct statement.