The ECB which is the European Central Bank “can ignore an appreciation of the euro against the dollar up to $ 1.20, but it would become much more complicated beyond this level” according to the vice-president of the ECB Luis de Guindos.
“I think $ 1.17, even $ 1.20, is something that we can ignore somewhat. Beyond that, it will be much more complicated. »»
To date, the Euro has been worth $ 1,179 up more than 13 % against the dollar since the start of the year.
If Trump needs a relatively “low” currency to boost exports and make imports of Chinese things more expensive which amounts to lowering consumption and improving the attractiveness of Made in America, the European Union, it still needs a euro allowing it to continue to export. Beyond 1.20 this will become complicated for European companies. Moreover, the last major increase in the euro, a company like Airbus had gone to install factories in the dollar zone to maintain its competitiveness due to a poor exchange rate.
It is already too late, but everything is not lost.
Prepare!
Charles Sannat
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