The record breaking strength of the Euro against the dollar is not all good news for the European economy. How to deal with the evolving global economic situation is the focal of the meeting of E.U. economy ministers this weekend in Porto, Portugal. The strong Euro helps EU countries pay the rising price of oil but European exports become dearer:
Gregory Moore, is Investment manager at Montsegur Finance: “Today on the market we’ve reached a record level on the Euro to dollar exchange rate that has reached nearly 1.39 dollars. This is helped by the hardening of monetary policy in Europe with a possible rate hike to come in the Eurozone in contrast to a possible softening of US monetary policy where we can expect a possible lowering of US interest rates.”
French President Nicolas Sarkozy wants the European Central Bank to play a more active role intervening in monetary policy to help keep French and European exports competitive. There is also growing concern in Germany, Europe’s major exporting country, that the powerful euro could upset European economic recovery before it really gets on its feet.