In fact, given that the nearly 9 percent rise in dollar prices of goods imported from western Europe since the start of 2002 has been far short of the rise in the euro, profit margins of euro-area exporters to the United States may well have turned negative. Nonetheless, euro-area exports to the United States, when expressed in euros, have slowed only modestly.
A possible reason is that European exporters' incentives to sell to the United States were diminished significantly less than indicated by the dollar price and exchange rate movements owing to accelerated short forward positions against the dollar in foreign exchange markets.