Exporters in Europe face a headwind if euro strength holds

Exporters in Europe face a headwind if euro strength holds

Exporters in Europe face a headwind if euro strength holds from CNBC.

In this short video at CNBC we discuss the risks of a strengthening EUR for European estimates:

  • Eurostoxx earnings’ growth estimates are at risk. A full year of EUR/USD above 1.20 means earnings growth could go to zero as most exporters in the index are mid-to-low value-added that fail to maintain margins if the European currency strengthens.
  • ECB’s inflation expectations are under threat. A full year of EUR/USD above 1.20 means both core and headline inflation could fall below 0.8% and 1.5% respectively.
  • ECB will likely have to postpone normalization of monetary policy while risk of fueling bubbles is mounting.

Daniel Lacalle is a PhD Economist, author of Escape from the Central Bank Trap and Life In The Financial Markets. He is Chief Economist at Tressis


 

About Daniel Lacalle

Daniel Lacalle (Madrid, 1967). PhD Economist and Fund Manager. Author of bestsellers "Life In The Financial Markets" and "The Energy World Is Flat" as well as "Escape From the Central Bank Trap". Daniel Lacalle (Madrid, 1967). PhD Economist and Fund Manager. Frequent collaborator with CNBC, Hedgeye, Wall Street Journal, El Español, A3 Media and 13TV. Holds the CIIA (Certified International Investment Analyst) and masters in Economic Investigation and IESE. Holds the CIIA (Certified International Investment Analyst) and masters in Economic Investigation and IESE.

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