Unimpresa warns: new global currency balance could hurt Italian SMEs, but open new doors in the East
A weakening dollar raises concerns in Italy
The current international landscape—shaped by the conflict with Iran and political uncertainty in the US—is pushing the US dollar into a phase of lateral weakness, fluctuating without a clear direction. Meanwhile, the euro is expected to strengthen, possibly reaching 1.17–1.20 EUR/USD within a year, according to estimates from the Unimpresa Research Center.
But this shifting balance in the currency market may have serious implications for a cornerstone of Italy’s economy: Made in Italy exports.
Export in trouble, margins under pressure
As Giuseppe Spadafora, vice president of Unimpresa, notes, a stronger euro makes Italian products more expensive and less competitive in dollar-based markets—particularly the United States. The most affected sectors include fashion, mechanics, and agri-food, already under pressure from high energy and financial costs.
Additionally, existing contracts fixed at previous exchange rates may suffer, as companies watch their profit margins shrink due to unfavorable currency movements.
Currency hedging and new market opportunities
Unimpresa explains that well-structured SMEs will cope better by leveraging currency hedging tools. However, many companies will need to adapt quickly, possibly with the help of facilitated finance and assisted internationalization.
This situation may actually present opportunities in Asian markets, especially in Japan, where the yen is strengthening and domestic demand could rise. For companies exporting high-quality and luxury goods, the shift in currency may make their products more appealing. Similarly, a weaker British pound in the short term might offer a competitive advantage in the UK, partially offsetting post-Brexit difficulties.
Outlook for the G4 currencies
Unimpresa’s report outlines the trends of the four main global currencies:
- Dollar (USD): Lateral weakening influenced by Trump’s policies and declining global trust.
- Euro (EUR): Moderate appreciation expected, potentially reaching 1.20.
- Yen (JPY): Strengthening due to monetary policy divergence, forecasted to move toward 138.
- Pound (GBP): Fragile in the short term, but may recover in the medium term.
Conclusion: strategic reaction required
Even though volatility is contained, Italian SMEs must not fall into inertia. Success will depend on anticipating currency shifts, diversifying markets, and actively managing exchange rate risk. Exports remain strategic for Italy—but only companies that adapt to these new dynamics will continue to grow.
FAQ
1. Why is the dollar weakening?
Due to uncertainty in US fiscal policy, the war in Iran, and declining trust in the dollar as a reserve currency.
2. Which Italian sectors are most affected?
Fashion, mechanics, and agri-food, especially those heavily reliant on US exports.
3. What does ‘lateral movement’ of the dollar mean?
A period with no clear trend, but within a limited range of fluctuation.
4. Will the euro continue to strengthen?
Yes, Unimpresa expects it to reach up to 1.20 USD in the next year.
5. How can SMEs defend themselves?
By using currency hedging, assisted internationalization, and renegotiating contracts and pricing.
6. Are there markets beyond the US?
Yes, particularly Japan and the UK, where currency shifts may favor Italian exporters.
7. What’s the yen forecast?
Expected to move between 138–146 USD/JPY, with potential monetary tightening by BoJ.
8. Will the pound rebound?
Possibly in the medium term, after a likely short-term dip due to BoE rate cuts.
9. What’s the Fed doing?
Rates were held steady in June, with two 25-basis-point cuts expected by year-end.
10. How do markets react during war?
Geopolitical crises can turn the dollar into a safe haven, unless the uncertainty stems from inside the US—then it weakens.
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