Blog: Weaker euro boost for Germans?
Dave Leggett | 6 June 2005
Interesting to see the weakening of the euro against the dollar over the last few months. If it carries on, it could at least lessen the adverse impact of reduced exchange rate hedging protection on car shipments from the eurozone to the US over the next few years. At the moment it is a case of weaker euro (European constitution rejections by voters, pared down eurozone economic growth forecasts) rather than a particularly strong dollar. But if the dollar finally gets a bit of a boost from a reduced trade deficit - and at some point, the tide should start to turn on the back of prolonged dollar weakness - and dollar strength kicks in alongside continued euro weakness, then things start to get interesting. It could be timely for the Germans (big exporters to the US), catching a major exchange rate shift in a favourable direction just as hedging protection falls off. Neil Winton is looking into this issue - discussing with the investment banks - for us.
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