07.10.2014 - The myth about currency
Recently the US dollar has surged. Its gain versus a basket of major currencies since the beginning of July as measured by the US Dollar Index ‘DXY’ is almost nine per cent as of this writing. Most of this appreciation has come at the expense of the New Zealand Kiwi, the Australian dollar and the euro. Many people like to point out that the recent weakness in the euro should be a boon to European exporters and large dominant European companies. This may explain some shorter-term fluctuation in profits but empirically it is not a major long-term driver. One has to remember that companies that dominate the European stock markets tend to have business units in several major currency blocs, and in many cases, the companies are actually hedged against large currency swings...............................................Full Article: Source
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