Justin Ho

Here's the problem when a currency gets too strong.

Ricardo Amaro is a lead economist at Oxford Economics.

He says when the euro's value rises...

Amaro says Europe's economy has already been struggling.

A strong euro poses a particular challenge for Germany, the biggest economy within the eurozone.

It relies heavily on exports, says Zachary Griffiths with the research company CreditSites.

The euro has been appreciating while Germany is in the middle of pushing through a big stimulus package meant to bolster defense in the region and grow its economy from within.

Griffith says a strong euro pushes against those efforts.

The strengthening euro could also affect what the European Central Bank decides to do with its interest rates.

Kenneth Kim is senior economist with KPMG.

He says that's because weak demand for European exports could result in inflation that's too low.

Last year, an ECB official told Bloomberg News that the euro at $1.20, which it recently hit, could complicate things for policymakers.

Ricardo Amaro with Oxford Economics says while the euro's value isn't currently raising any red flags.

The ECB will make its next decision on interest rates a week from tomorrow.

I'm Justin Ho for Marketplace.

When you think about it from just the cost of debt capital perspective, 2020 and 2021 were very low interest rate years.

When you think about it from just the cost of debt capital perspective, 2020 and 2021 were very low interest rate years.

They need to refinance their debt.

They need to refinance their debt.

So that is probably the primary driver of supply.