Euro Slide Silver Lining for Exporters
(Financial Times – Ralph Atkins)
Steep declines in the euro symbolize the woes of Europe’s monetary union but could have a silver lining: the boost to exporters may offer some much-needed support to economic growth across the 17-country region.
Last year, even as the euro crisis escalated, the currency’s value remained remarkably steady. In recent weeks, however, financial market sentiment towards the euro has turned decisively for the worse.
On a trade-weighted basis, the euro has fallen by more than 6% over the past year to the lowest since 2003. Against the dollar, the euro has dropped to a near two-year low of about $1.25. On a rough rule-of-thumb used by economists, a 10% fall in the euro’s trade-weighted value should boost economic growth by about 0.5 percentage points or more. Read more here.
Date: May 29, 2012