Currency rise worries European firms

Although euro-zone fund managers are generally optimistic about the prospects for 2004 they are worried about the impact of a strong euro.

Sara Silano 8 January, 2004 | 7:13PM
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The MSCI Euro index gained 3.8% in December in euro terms while it rose close to 14% in 2003. Meanwhile, the euro reached $1.26 on December 31st and has appreciated by about 20% over the past year.

Despite the euro’s rise managers remain optimistic about the currency’s prospects according to the latest Morningstar European fund trends survey. Some 69% of fund groups expect the euro to be the best performer among the world’s main currencies in 2004 while 90% said the dollar would perform worst.

The euro fell to an all-time low of $0.82 on October 26th 2000. Currently analysts think it could move towards $1.30-$1.35.

A strong euro is a particular problem for companies exporting to America while more generally it threatens to undermine an already weak recovery in

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About Author

Sara Silano

Sara Silano  is Editorial Manager for Morningstar Italy