Eurozone finance ministers are due to gather in Brussels later today to discuss the return of unrest in the troubled region and to discuss the sticky issue of the strength of the single currency, a strength that France is blaming for making its exports less competitive.
In the past six months the Euro has soared in strength by around 6% against most of its most traded peers. A study conducted by Deutsche Bank last month calculated that France’s exporters start being priced out of the world markets when the Euro rises above the $1.22-$1.24 mark, a level that it surpassed long ago.
Meanwhile, Germany’s higher value-added export products, however, only start to become disadvantaged when the exchange rate surpasses the $1.54 level. Up until that level is reached the German economy is little affected and benefits from the strong Euro due it keeping the price of imports and inflation in check.
“We do not agree on economic policy and a number of other areas,” Jean Dominique Giuliani, head of the Robert Schuman Foundation, a French Think-Tank said. “The gulf between France and Germany is widening somewhat and that worries me.”
The prospect of a currency war is rising as other nations including Japan have taken action to forcefully weaken the value of its currency. French Finance Minister Minister called for the European Central Bank to consider setting a target rate for the single currency in a bid to steer it lower if it becomes too strong.
The split between the Northern and Southern European economies is growing and France must be getting worried that it is ending up on the wrong side of the split.
EUR Exchange Rates
As of 10:20 am
The Euro to Pound Sterling exchange rate is currently trading in the region of 0.85220
The Euro to US Dollar exchange rate is currently trading in the region of 1.34029
The Euro to Australian Dollar exchange rate is currently trading in the region of 1.30439
The Euro to New Zealand Dollar exchange rate is currently trading in the region of 1.61089
The Euro to Canadian Dollar exchange rate is currently trading in the region of 1.34879
The Euro to Emirati Dirham exchange rate is currently trading in the region of 4.92223
The Euro to Swiss Franc is currently trading in the region of 1.22729
The Euro to Japanese Yen exchange rate is currently trading in the region of 124.97625
