However, the effect of an exchange rate movement will depend in large part on whether it has occurred in response to other developments, such as a change in commodity prices. The consequences of such exchange rate movements are predictable to some degree and, in many instances, have tended to help insulate the economy from adverse developments offshore or even domestically.
In my capacity as a euro area central banker, let me provide some evidence pertaining to this vast region of Europe, which in around one month’s time will span 17 different countries. The euro area is, alongside the United States, the main destination for Chinese exports, with an export share of 15% in 2008.