Euro Official: Strong Euro Has Not Yet Hit Pain Threshold for European Exports.
The euro currency zone's top official said Tuesday that the strong euro has not yet hit the pain threshold for European exporters. Luxembourg Prime Minister Jean-Claude Juncker said he did not see the strong euro hurting the European economy "for the time being."
The euro reached a record high of $1.5912 on Thursday, making German cars and French champagne more expensive for American customers. The high exchange rate also has an upside for Europe because it helps ease euro-zone inflation by reducing the cost of dollar-priced oil imports.
Juncker, who leads monthly economy talks between the 15 euro nations, refused to say what level would hurt European exporters but said "we are not stepping away from it." "For the time being we don't have a too huge impact on the real economy," he said. "The export sector is developing quite well. The moment will come where the exchange rate level will start to cause serious harm to the European economy."
Record sales figures from Europe's biggest automaker Volkswagen AG back him up. VW said Tuesday that car sales in the first three months of the year hit the best quarterly figure ever despite the dampening effect of exchange rates on exports. Sales to the U.S. fell slightly but these was more than compensated by surging demand in China and Brazil.
Juncker said he hoped that exchange rate traders were listening to comments made by the world's seven leading industrial nations at G7 talks in Washington last weekend and pay more attention to long-term economic trends instead of speculating on short-term data.
"I sincerely hope that in a certain amount of time from now financial markets (would be) ... stepping away from one way bets and they are taking into account longer perspectives, economic fundamentals, and that they are less driven by short-term economic information.
He told reporters that he was confident U.S. officials realized that a strong dollar was in the interest of the American economy. A weak dollar makes U.S. exports more attractive to other nations.
In a speech he gave earlier at a euro economy conference at the EU's Economic and Social Committee, Juncker said he expected the effects of the current credit crunch to last throughout this year and spill into 2009.
Major banks have reported billions of dollars (euros) in losses as complex investments based on the falling U.S. housing market are rated more risky than they initially appeared. A lack of confidence in the lending system has caused banks across the world economy to be more fearful of giving out loans, sharpening an economic slowdown by making it harder for business to get credits and homebuyers to secure mortgages.
The euro currency zone's top official said Tuesday that the strong euro has not yet hit the pain threshold for European exporters. Luxembourg Prime Minister Jean-Claude Juncker said he did not see the strong euro hurting the European economy "for the time being."
The euro reached a record high of $1.5912 on Thursday, making German cars and French champagne more expensive for American customers. The high exchange rate also has an upside for Europe because it helps ease euro-zone inflation by reducing the cost of dollar-priced oil imports.
Juncker, who leads monthly economy talks between the 15 euro nations, refused to say what level would hurt European exporters but said "we are not stepping away from it." "For the time being we don't have a too huge impact on the real economy," he said. "The export sector is developing quite well. The moment will come where the exchange rate level will start to cause serious harm to the European economy."
Record sales figures from Europe's biggest automaker Volkswagen AG back him up. VW said Tuesday that car sales in the first three months of the year hit the best quarterly figure ever despite the dampening effect of exchange rates on exports. Sales to the U.S. fell slightly but these was more than compensated by surging demand in China and Brazil.
Juncker said he hoped that exchange rate traders were listening to comments made by the world's seven leading industrial nations at G7 talks in Washington last weekend and pay more attention to long-term economic trends instead of speculating on short-term data.
"I sincerely hope that in a certain amount of time from now financial markets (would be) ... stepping away from one way bets and they are taking into account longer perspectives, economic fundamentals, and that they are less driven by short-term economic information.
He told reporters that he was confident U.S. officials realized that a strong dollar was in the interest of the American economy. A weak dollar makes U.S. exports more attractive to other nations.
In a speech he gave earlier at a euro economy conference at the EU's Economic and Social Committee, Juncker said he expected the effects of the current credit crunch to last throughout this year and spill into 2009.
Major banks have reported billions of dollars (euros) in losses as complex investments based on the falling U.S. housing market are rated more risky than they initially appeared. A lack of confidence in the lending system has caused banks across the world economy to be more fearful of giving out loans, sharpening an economic slowdown by making it harder for business to get credits and homebuyers to secure mortgages.
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