European stocks benefit when the dollar rises

European Stock1


IMPORTANT POINTS:

  • The US dollar has strengthened due to the high rates kept by the Fed, something that favors some European stocks.
  • In early September, the dollar index hit its highest level since March and analysts expect further gains.
  • In this context, Bank of America named 10 European stocks that tend to obtain good returns.

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The US dollar has been in an upward trend for several weeks thanks to the Federal Reserve announcing that interest rates will be higher for a longer time.

The dollar index reached its highest level since March of this year in early September and analysts assure that there will be further increases in the currency in the coming months.

The reality is that a more expensive dollar usually harms many foreign industries. However, there are a number of European stocks that could benefit in this context, Bank of America said .

European stocks that could benefit

The bank pointed out companies from the “old continent” that can “ obtain better results ” when the dollar is on the rise.

“Over the last five years, low-risk, energy and Norwegian stocks have tended to outperform when the DXY index has been rising,” they clarified from BofA.

In that sense he named 10 European stocks: British American TobaccoDiageoBP, the Danish company NovozymesQiager and Bayer from Germany and the Swiss pharmaceutical company Roche.

It also chose the Dutch company Wolters Kluwer, the Italian company Tenaris and the Finnish company Nokia.