With the energy crises that have emerged in recent months, which many consider the prelude to an economic recession, the dollar has been one of the few that has been able to put themselves to these falls, causing July 14, 2022 to achieve a new parity with the euro, something that had not been seen in the last 20 years. Although, since then the euro has recovered significantly, new market trends are put in favor of the dollar.
Weak euro impact
The new parity of the euro and the dollar is something that had not been seen since 2008, being a situation that can make exports get back, especially benefiting tourists traveling to Europe who will find much more accessible prices.
However, the greatest positive aspects of the euro are overshadowed by the effects caused by the war in Ukraine and Pandemia, since a weak euro causes inflation to be imported, which is just the opposite that is currently being sought with the activation of the post covid economy.
Therefore, with the new revaluation of the dollar against the euro, experts recommend that the dollar be used to acquire the energy products they need, taking advantage of the quote that show materials such as gas or oil.
Why invest in Ibex with the weak euro?
The effects of the strength of the dollar are something that the companies belonging to Ibex 35 will stop feeling, according to a study by Goldman Sachs that 35% of the income of these companies correspond to Spain, while 44% are gestated outside of Europe. Therefore, these values are more exposed to the fluctis of the currencies, so an increase in the price of a currency implies the increase in its benefits.
So, investing in these companies that undergo these changes can bring excellent benefits for people. However, you also have to take into account those Ibex 35 companies that cover the unexpected movements, being cushioned when the exchange rate harms them or benefits them. Among these companies we can highlight Endesa, Enagás, Aena, Caixabank, Merlin or Red Electric, which have more than 90% of their turnover in euros and are not affected by the increase in the dollar.
Myinvestor investment director, Igani Vilarasu, talks about the fact that some benefit can also be taken from industrial sectors, although many of the benefits of the weak euro can be mitigated due to the increase in energy if the company in question is intensive in its use. Likewise, although dollars in dollars are increasing with the fall of the value of the euro, it will be the decision of the same company if it invoices its debts with dollars or not, depending on their interest. So, it is necessary to make a detailed analysis before investing in the market.