On the news last week peter mandleson the EU trade commissioner had a meeting with the chinese about revaluing the chinese currency. This is because the EU now has the biggest trade deficit in the world with china even bigger than the US. The main reason for the US trade deficit is because of chinese imports and this has been the reason for the falling dollar. If the EU now has an even bigger trade deficit (albeit with china)how long can the euro remain at these levels against the dollar. I think we have reached the peak of the euro/dollar valuations although i also thought the same at $1.35. I think the ECB will have to reduce interest rates and this could cause a dramatic fall in the euro maybe back down to $1.25.