Euro Weakness Bad For Multi-national Companies

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Euro Weakness Bad For Multi-national Companies

By David Spurr on February 14, 2009 | More Posts By David Spurr | Author's Website

The recent panic in the financial markets has reaffirmed the belief that the US dollar is a safe haven. The Euro has been in a free fall ever since it pegged 1.60/usd last year. This weakness has a negative impact on companies that have large foreign sales. Coca-Cola (KO), Pepsi (PEP), Proctor and Gamble (PG) etc are large multinationals that have recently taken a major hit. I would expect this type of price action will continue until the US dollar starts to weaken further. The above chart gives a visual example of the correlation between the Euro and the equity.

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