The embattled euro is poised to drop further but the economic impact on North American economies appears to be limited, economists from IHS Global Insight said.
“We see this as a relatively minor speed bump for the U.S. and Canada recoveries,” said Nigel Gault, chief U.S. economist for IHS Global Insight, in a webcast hosted by his company.
Brian Bethune, the firm’s chief North American financial economist, said the euro has dropped 19 percent from its peak and will remain under pressure as European Union members struggle to avoid defections from the currency.
“We don’t see that situation changing, and in fact a correction of about 25 percent … is probably what is needed at this point in order to offset some of the brakes they’re going to put on” through austerity measures in heavily indebted member countries, Bethune said.
Gault said a weaker euro will provide an advantage to European exporters of capital goods and industrial commodities but that the dollar also faces long-term problems from rising U.S. debt.
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