Weak euro – the engine for markets

Wall Street is concerned that the strengthening of the dollar and the economic slowdown in Europe could have a negative impact on American companies, while investors expect next week when start reporting earnings for the third quarter.

However, the rise in the dollar against the euro may be at hand the euro area, as the weakening currency will stimulate the growth of exports from the region, as once the dollar’s decline has given impetus to some sectors of the economy of the USA during the recession.

“Weak euro will mean that Europe has become more competitive in the global economy,” – says Art Hogan, chief market strategist at Wunderlich Securities.

“With the weakening of the euro will stabilize exports from Europe; as was the case in the United States, the weak dollar has helped renew the growth of the economy and get it back on track, “- said James Liu, a specialist in strategic global markets JP Morgan Funds.

“The weakening of the currency will benefit European companies, which means that the European markets will get momentum,” – said Liu.

“However, the rise in the dollar is undesirable for large global companies, but most of them are protected against currency fluctuations,” – believes Kate Warne, a strategic expert Edward Jones.

However, there is another scenario that investors underestimate – “if we expect that the growth of the dollar will cause decline in profits of American companies, it is therefore said that the profits of European companies will continue to grow; Investors can benefit from strengthening of the dollar and will invest in European companies, “- said Warne.