Gavekal Capital has come out recently with their view on the Euro. They're thinking that in a couple of years, the Euro could be trading at $1.05 - $1.10. For the most part currency rates are determined by relative rates of return on capital. They cite slower growth, as Europe has an aging population. Also the "Islamic-ization" of Europe could impact the EU negatively. Wealth generation is higher in the U.S., as is productivity, capacity utilization and technological innovation.
Their view on the Euro is not the consensus view, but is noteworthy.
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