MD Foods' largest export currency is now the Euro. As several of MD Foods' largest export markets are within the new European currency area, which came into force on January 1, almost half MD's export accounts are now settled in Euros. In particular, the German mark, the French franc and the Italian lire have been replaced by the Euro.
Although the overall number of currencies used has fallen, the effect on MD Foods is moderate. The reason is, explains Finance Director Mogens Møller, that Denmark's economic policies have for years linked the Danish kroner closely to the German mark and, therefore, now to the Euro.
"MD Foods' foreign exchange risks primarily relate to sterling and US dollar which tend to fluctuate a great deal. When these currencies go up, MD Foods benefits. When they fall, it's to our disadvantage," says Møller.
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