Stronger euro could hurt luxury goods exports from Europe
The EURO has been streghtening in the past 3 months, reaching highest levels in relation with the US dollar and other major currencies. Much like in the case of the Swiss Franc, which has been having continued negative effects on Swiss exports pushing luxury goods prices at historial levels, the strength of the EURO could impact similarly major luxury goods manufacturers, especially in Italy, which is the number one European producer of luxury leather and apparel goods. The currency valuation is only likely to add to the growing prices of raw materials, especially rare leathers and silk.
The negative impact of the strong EURO could translate in an imminent 10 to 15% increase in luxury leather goods (made in Europe) as well as a blow to financial performance in the mid to long term.