Citi: A Stronger Euro Could Cast a Shadow Over European Stocks

Glonghui, January 28th｜Citi Group strategists pointed out in a research report that as investors seek to diversify away from US assets, the strengthening of the euro against the US dollar has once again become a focal point, which may cast a shadow over European stock markets. The strategists stated that continued euro appreciation will reinforce a neutral view on European equities, as recent transatlantic tensions and tariff uncertainties have weakened the short-term investment outlook and raised doubts about the overall earnings recovery this year. According to Citi's calculations, for every 10% appreciation of the euro against the US dollar, European companies' earnings per share may decrease by about 2%. Citi added that the commodities, food and beverage, healthcare, luxury goods, and automotive sectors appear to be the most vulnerable to impact.