Published by Global Banking & Finance Review®
Posted on January 28, 2026
2 min readLast updated: January 28, 2026
Add as preferred source on GoogleChancellor Merz warns that a weak dollar burdens German exports, urging for a digital euro to strengthen the economy and reduce reliance on the dollar.
Jan 28 (Reuters) - Chancellor Friedrich Merz joined the head of Germany's main foreign trade association on Wednesday in voicing concern over the sharp weakening in the dollar, after it fell to a four-year low.
"I have watched the dollar rate with concern, for some time," Merz told a news conference ahead of a meeting with his coalition partners in Berlin. "The dollar course is a considerable extra burden for the German export economy."
Earlier, President Donald Trump brushed off concern about the level of U.S. currency, saying the value of the dollar was "great", when asked about recent falls, which at times took the dollar past the level of 1.20 to the euro.
Merz's comments echoed similar remarks from Dirk Jandura, head of the BGA, Germany's wholesale and foreign trade association, who said the strength of the euro, which puts up the cost of German products, was causing exporters "great concern".
"A strong euro makes German products more expensive on world markets and makes competitivity problems more severe," he told Reuters. "Especially for mid-sized exporters with narrow margins, it's a serious risk because they often can't dampen exchange risks."
Germany's export-reliant economy has struggled in recent years, with growth scraping into positive territory last year after two years of recession. Exporters, facing growing competition from China and an increasingly uncertain world environment, have been hit as the euro has risen against the dollar.
Merz and Finance Minister Lars Klingbeil both called for swift agreement over the creation of a digital euro, which they said would help consolidate the euro's position in global markets.
"We want to push for the euro to be accepted as a leading currency in the world next to the dollar. That would also reduce our dependence on the dollar rate," he said.
(Reporting by James Mackenzie, Rene Wagner; Editing by Alistair Bell)
A weak dollar refers to a situation where the value of the U.S. dollar decreases compared to other currencies, making imports more expensive and exports cheaper.
Currency hedging is a financial strategy used to protect against potential losses due to fluctuations in exchange rates, often involving derivatives or other financial instruments.
The euro is the official currency of the Eurozone, used by 19 of the 27 European Union member countries, facilitating easier trade and economic stability among its members.
Economic growth is an increase in the production of goods and services in an economy over a period, typically measured by the rise in Gross Domestic Product (GDP).
Imports are goods and services purchased from other countries, while exports are goods and services sold to other countries, both crucial for international trade.
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