The news of the European Union’s severely debt-laden countries and €1 trillion bailout has hampered the euro. In the last six months, the currency has declined 17 percent against the U.S. dollar.
France’s gross domestic product for first-quarter grew 0.1 percent from fourth-quarter 2009. But French exports rose almost 4 percent, compared to 0.4 percent for fourth-quarter 2009 and all industries, from equipment goods to manufactured goods, experienced gains. The Euro zone’s exports rose 7 percent from February 2010 and reported a €4.5 billion trade surplus.
“A weaker currency helps exports,” said Cornelius Luca, president of LGR, a financial trading company. “But it also doesn’t mean a short-term decrease will make much of a difference.”
Chairman Philippe Crouzet foresees continued pressure on the company’s numbers in the first half of the year before picking up in the second half. “We see a clear higher activity in the U.S. of course for oil and gas applications and in non-energy markets, which as you may remember, were the first markets to fall down at the end of 2007, in fact, 2008, beginning of 2008,” he said during the company’s earnings call.
Luca said the euro’s recent five-week slide is not a concern. Since the euro’s 1999 inception, at $1.17, the currency hit an all-time low of 82 cents on Oct. 25, 2000 and peaked at $1.59 on July 15, 2008.
As of 1 p.m. CST, the euro rebounded 1.21 percent from yesterday’s close and was trading at $1.23.
“I think the market has been overboard,” said Luca, who also mentioned the euro has been oversold. “There’s been dramatic, dramatic events and trading got a bit out of hand. It’s bad but it’s not the end of the world.”