Strong euro not hitting recovery, says Bundesbank
The Bundesbank said today in its February monthly report that the stronger euro is not disturbing
the economic recovery in the euro area so far.
The bank said that the European Central Bank's "very generous" monetary conditions are also not standing in the way of an economic recovery and that strong global demand is offsetting the effect of the strong euro.
"Due to a robust and stronger-than-expected global recovery, the depreciation of the US dollar against other important currencies has so far not disturbed the expansion process in the euro area," the bank said.
The Bundesbank noted that the euro has not risen nearly as strongly against the currencies of other
euro zone trading partners.
"While the euro appreciated 20.5% against the US dollar in 2003, it rose just 11.5% on a trade-weighted basis against the currencies of the 12 most important trading partners," it said.
It added that domestic companies are also benefiting from cheaper imports as a result of the dollar's decline.
