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Despite A Strong Euro, Investors Are Still Worried About European Stocks

Despite A Strong Euro, Investors Are Still Worried About European Stocks

A weaker U.S. dollar and stronger euro aren't compelling enough to reassure European investors, even at a time when the European Central Bank's Mario Draghi is touting the region's "robust recovery," Bloomberg reported.

The euro is trading near its highest levels seen since January 2015, yet at the same time, the Euro Stoxx 50 Index fell nearly 1 percent this week. In fact, the central bank left its quantitative-easing program, which has supported equity prices for years unchanged.

But investors seeking investment opportunities in Europe are now tackling with what life would look like when the ECB one day removes its floor support to stocks, Bloomberg added. Meanwhile, investors are now expecting European companies to improve their earnings at home as a counter to exports, which are now more expensive for international clients given a stronger euro.

European companies, like their American peers, are heading into peak earnings season, and investors have reason to be worried. But some are still making the case that all is well in the eurozone, including Barclays' head of investment strategy William Hobbs.

Better demand for European products is expected to outweigh the stronger euro, and this will show in earnings reports, Hobbs told Bloomberg.

"The patient is leaving the emergency room," said Hobbs. "This should be important for both stocks and the euro. Let's see what next week brings."

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