So what’s with the euro, anyway? Here we are, 14 months after its birth, and Europe’s long-awaited supercurrency can’t even buy a buck. It has steadily slipped, losing nearly 20 percent of its value against the dollar since Jan. 1, 1999. And the recent roller-coaster ride points to a deeper malaise–there’s just not much liquidity in the currency nowadays, making it easier for a few players to knock it around. “So many people have lost money on the euro, hunkering down is not a bad strategy,” says Steven Englander, director of economic and market analysis at Salomon Smith Barney in London.

Sure, you can argue–as the European Central Bank gamely does–that the euro deserves to get stronger. Economic growth in the 11 countries that use it will top 3 percent this year. Governments are starting to implement tax cuts and other policies that will help companies be more flexible. Unemployment in Euroland (though still an embarrassingly high 9.6 percent) is coming down. Stock markets serving entrepreneurial companies are skyrocketing–Germany’s Neuer Markt index has nearly tripled since the euro’s launch. Venture capital from people like John Borchers, a partner at Palo Alto-based Crescendo Ventures, is pouring in. “So much has changed in the past 18 months, there are incredible investment opportunities in Europe,” says Borchers.

Trouble is, whatever Europe is doing now, the United States is doing, well, better. Data just released show that the U.S. economy in the fourth quarter of 1999 grew 6.9 percent, for heaven’s sake. Inflation is still low. Anyone who can walk and chew gum has a choice of job offers. And everybody is buying the Nasdaq, including Europeans like Benjamin Tange, 31, of Hamburg. His investment in AOL has quadrupled, and the shares of e-commerce software company Ariba that he bought last November have tripled. The failure of the long-anticipated U.S. slowdown to materialize has only fortified faith in the American Story. Alan Greenspan’s interest-rate increases have yet to cool things off–and meanwhile, they’re helping to keep the dollar strong. For Europe to get any attention, it has to surprise the market with some super growth numbers. Think of it in sports terms, as market people do. “The euro is like a highly drafted rookie who was thrown into play and flopped,” says Cameron Crise, a currency strategist for Warburg Dillon Read in London. “Now he really has to prove himself before they’ll throw him back in again.”

Certainly the ECB hasn’t helped any. With 17 governing council members and 11 Finance ministers frequently sending conflicting signals about interest-rate policy, the bank is still battling a little credibility problem. “It’s extremely simple and we’ve said it a hundred times,” says vice president Christian Noyer, barely concealing his exasperation at a press conference last Thursday. “There is one single message. You just listen to it.” And indeed, after a week or so of confusion, provoked in part by comments from Noyer himself, the spotlight was on last Thursday’s governing council meeting. They did not raise interest rates–it would have looked too much like panic over the euro’s tumble–but ECB president Wim Duisenberg strongly hinted that rising inflation will lead to a rate hike soon.

But it really isn’t in Duisenberg’s power to turn the euro around. “The kick-start has to come from a little jitter in the United States,” says Alison Cottrell, chief international economist for PaineWebber in London. Then investors will finally take a closer look at Europe, which is valiantly trying to remake itself into a sexy New Economy play as well. That’s why, when the euro does hit bottom, it could bounce back with authority. “It’s like pulling a stone with elastic,” says Kit Juckes, currency strategist for NatWest Financial Markets. “You pull, nothing happens for a while, then it shoots forward.” That’s not exactly what Duisenberg wants; central bankers hate to see their currencies move rapidly in either direction. But a stronger euro would sure make those press conferences a lot less stressful.