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A Weak Dollar Pummels European Exporters Feb 08
Standard & Poors, Feb 2008
Abstract
European businesses are feeling the pinch of the strong euro. The currency's drive toward the $1.50 mark against the U.S. dollar is crossing the pain threshold for many companies, particularly those that manufacture in the Eurozone but sell large amounts to dollar-linked countries. Those which trade in British pound sterling have similarly suffered where their sales to U.S. markets are high. The region's highly export-oriented aerospace and defense, automotive, forest products, and hi-tech industries are most exposed, to the detriment of their profitability, cash flows, and competitiveness. Standard & Poor's Ratings Services believes deep and sustained U.S. dollar weakness could pressure the ratings on individual companies in these sectors (see table 1). For other sectors, the effects of a weakening...
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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