The euro seems not only to defy gravity, having risen steadily against the dollar, but to defy logic as well. It would seem quite logical that as the euro gains strength, euro-based exporters would feel the pinch of tightening competition.
Indeed, normally the appreciation of the 17-country currency prompts howls of protest from exporters, but not this year. The reason: While the euro has surged against the dollar, it has fallen against several core euro area competitors, notably the Swiss franc, the Swedish krona and the Danish krone.
That peculiarity means euro-based merchants still hold a small price advantage over exporters in northern and central Europe, and hence have suffered less than in previous years.
