Answer to Question #283721 in Macroeconomics for ABEX

Question

23. The Euro has been consistently strong against USD. What would be the impact of this trend on the Euro zone economy in particular that of Germany?

Answer 1

A stronger euro means more buying power for European consumers. This causes a rise in exports by American companies to Europe, which is among the largest consumers of American goods. Higher revenues signal good financial health to investors, whose demand for shares pushes up the value of the stock.