Who will cope best with the strong euro?

With global demand recovering pretty strongly, for at least a few quarters, the ongoing rise of the euro is unlikely to halt the external sector revival in its tracks. Nonetheless, we expect exporters in some euro-zone economies to fare worse than others. Northern European economies’ strong trade links with the rest of the world might suggest that they are most vulnerable to the strong euro. But they are also better placed to lower their margins to maintain sales.