Rising Euro Increases Europe’s Power Plant Gains

Reuters reported the rise in profitability of European coal for power generation due to the Euro’s gains against the dollar since the ECB bond plan to benefit troubled Euro zone members.

As quoted in the report:

A higher euro increases the purchasing power of European utilities that buy coal in the dollar-traded coal market to produce electricity that is sold domestically in euros.

Europe’s common currency has risen almost 5 percent since the German supreme court allowed the government to ratify a policy that will allow the European Central Bank to buy up government bonds of troubled euro zone members.

One utility trader commented:

Coal has already been the fuel of choice for utilities that can switch between coal and gas, because there is a coal oversupply while gas is a bit tight. The rising euro will only strengthen that trend.

Click here to read the full Reuters report.

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