Is Rising Euro hurting Euro-zone? - Real Time Insight
14 Fevereiro 2013 - 12:49PM
Zacks
Euro-zone GDP declined 0.6% in the last quarter of 2012, quarter
on quarter, or 2.3% annualized. This was the third consecutive
quarterly decline and the fastest rate of decline since the height
of financial crisis in 2009.
Increasing unemployment and fiscal tightening are already
impacting domestic consumption in the region. Further, rising Euro
has made European exports expensive hurting their
competitiveness.
Last month, the IMF revised downwards its estimate for Euro-zone
GDP to a contraction of 0.2% for 2013 from its earlier estimate of
an expansion of 0.2%.
The situation in the Euro-zone has somewhat stabilized since
European Central Bank’s pledge last year to do “whatever it takes”
to preserve the union. As a result of renewed confidence, the Euro
has appreciated significantly in the last six months—up 9.13%
against the U.S. Dollar.
![](http://www.zacks.com/images/upload_dir/1360869921.jpg)
While French President has called for establishing an exchange
rate policy, the German policy makers are against any exchange rate
intervention. Not surprising since German companies have more
flexibility to raise prices (due to composition of German exports)
as well as to reduce costs (agreements with labor unions).
According to Deutsche Bank estimates, German exports can remain
competitive with Euro at $1.79, while French and Italian exports
suffer at $1.24 and at $1.17 respectively.
Do you think that Euro’s strength will further hurt Euro-zone’s
chances of rebounding anytime soon?
PRO-ULS EURO (EUO): ETF Research Reports
CRYSHS-EURO TR (FXE): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
ProShares UltraShort Euro (AMEX:EUO)
Gráfico Histórico do Ativo
De Jul 2024 até Ago 2024
ProShares UltraShort Euro (AMEX:EUO)
Gráfico Histórico do Ativo
De Ago 2023 até Ago 2024
Notícias em tempo-real sobre ProShares UltraShort Euro da American Stock Exchange bolsa de valores: 0 artigos recentes
Mais Notícias de Proshares Ultrashort Euro