The sharp increase in the euro against the dollar since Donald Trump’s return presses French export companies whose finances are already proof of the commercial war.
At the beginning of July, the euro has reached its highest level since the 2021 drop against the dollar, which suffered a loss of investor confidence due to the erratic policy of Donald Trump.
And since the beginning of the year, the unique currency appreciated 13% against Greenback.
However, with 48.6 billion euros in goods exported to the United States in 2024, this country is the second export destination of France in value behind Germany, according to a study of French custom on Friday.
2,000 interested companies
Therefore, some 2,000 French companies that produce more than half of exports to the United States are exposed to this market for 10% or more of its turnover.
This is already seen in the financial results of European companies, “in particular in sectors strongly oriented towards export, such as luxury, industry or automobile,” Stephen Innes, SPI AM analyst, explains to the AFP.
In France, Rémy Cintreau, a great name in Cognac, estimates that almost 9 million euros losses linked to the unfavorable exchange rate for the first trimester of its exercise unusual.
The Automotive Supplier Valeo has reviewed its billing objective by 2025, taking into account “mainly an unfavorable exchange effect of 750 million euros.”
The drop in the dollar has sealed the accounts of Eurazeo, a French investment and management company that appears in Paris. The group had to depreciate more than 150 million euros the value of the companies in the first half.
Cumulative effect
The same observation in another part of Europe, from the Finnish giant of the Nokia telecommunications to the provider of German sports teams Puma, losing more than 17% at noon on Friday in the Frankfurt Stock Exchange after publications of disappointing results in the face of the weight of the exchange effects and customs tasks.
“About 60% of the income of Stoxx 600 companies (the PAN -Europeo index that brings together the 600 largest stock markets in the old continent, the editor’s note) comes from outside Europe,” said Ipek Ozkardeskaya, an analyst at Swissquote Bank.
To this are added the effects of customs tasks at the 10% floor level applied since April by the United States to the European Union that adds the cost of a 23% European product for a buyer in the United States.
This “forms a bitter cocktail for the European economic fabric,” says Ipek Ozkardeskaya.
A commercial agreement between the EU and the United States seems to be taking shape between Brussels and Washington, with customs of 15% in European exports for the United States and exemptions for certain sectors.
The euro is in an ascending spiral, appreciating how markets welcome to finally avoid the worst. The president had taken the European Union in the Court on July 12 through the decree of the customs tariffs of 30% in all EU imports as of August 1.
At the same time, the United States is working on the depreciation of the backback, which the Trump administration judges overvalued, that, according to it, it weighs on the US industry and its competitiveness.
It seeks to “maintain the state of the international reserve currency, while devaluing it,” summarizes Eric Dor.
Source: BFM TV
