Germany's BGA foreign trade and wholesalers' association said today it did not expect the euro to rise beyond $1.20 against the dollar this year and that current foreign exchange developments were no cause for panic.
"I expect the euro to appreciate slightly in the coming months, but I don't expect it to exceed $1.20," BGA president Mr Anton Boerner told reporters on the sidelines of a news conference.
The euro is trading at $1.1496 against the greenback, having hit a high of $1.19 at the end of May.
Mr Boerner said German exporters could cope with movements in the dollar and euro against Asian currencies, and that there was no cause for panic.
"It's nothing shocking," he said, adding that currency exchange rates were developing as expected and did not warrant a reassessment of the BGA's forecasts.
German companies have been hit particularly hard by the euro's recent strength against the dollar, which has dampened demand for German goods abroad at a time when domestic demand is already weak.
Still, Mr Boerner said he expected wholesale sales to grow by 0.1 per cent in 2003, and could even grow 1 per cent in 2004, provided the global economy picked up and the euro did not rise abruptly.
He added he expected the German economy to show zero growth this year, and to expand by 1.5 per cent in 2004.
The government expects the economy to grow by 0.75 per cent this year and 2 per cent in 2004.