CFD Europe 50 candlestick
European stocks are group of major multinational corporations.
Those corporations carry lower valuations than US stocks but compete with them around the world.
A weaker dollar will make the European companies more price competitive.
Remember that the weaker US economy and stronger dollar vs the Euro will hit US multinationals’ exports to Europe.
What does a weaker Euro mean for investors in European stocks through a US $ denominated ETF. A lower dollar will reduce any gains on the European stock investment and of course increase losses.
Should You Hedge the Currency Risk on Your European Stocks ECB on the contrary has indicated it plans to keep rates low for an extended period this means the interest rate differential is near certain not to reverse and the likelihood is very high it will widen The ECB favors a weaker Euro.
A strong trend towards a weaker Euro against the USD is already in place.