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Each anniversary has its own anxiety. At the beginning of 2003, it was the inflationary euro. Today, two years after the start of bill and coin circulation, it's the strong euro. During the past year, the European currency has appreciated by 22% against the dollar and for the past month, it has hit one record after another against the dollar. Yesterday, the euro crossed the threshold of 1.26 dollars. Numerous forecasters, moreover, judge that the dollar's fall will continue for one essential reason: the size of American budget deficits panics investors, especially in Asia. On top of that, no improvement is on the horizon. These last few days, speculators have had a field day, taking advantage of low volumes on exchange markets to pound the dollar.
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Today everyone asks the same question: how high can the euro climb? "The dollar seems to be engaged in an endless fall," one Hong Kong and Shanghai Banking Corp economist pronounced. Some groups, like LVMH or Danone, console themselves with their Asian exports. Others get ready for the worst. Philippe Camus, joint president of EADS, Airbus' mother company, declared in mid-December that his group would have to adopt "radical" measures should the European currency exceed the $1.30 threshold for any extended period, by increasing the proportion of suppliers "whose costs are in dollars."
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