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Subject:  Re: Currency Effects on Country Funds Date:  11/21/2003  11:00 AM
Author:  yobria Number:  37934 of 88758

Absent other factors, you should expect a 10% increase in the euro vs the dollar to increase the value of securities held in that currency by 10%.

The problem is the other factors. First it depends on the hedging strategies of the fund, which may have purchased currency derivatives to give shareholders the pure return of the foreign market. Also, a stronger currency may reduce the earnings (and thus the price) of multinational stocks, since foreign earnings may decline as a result.

Sometimes funds provide info on this sort of thing, but not, apparently, the GER fund.


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