German government, industry unfazed by strong euro

BERLIN (Reuters) - Germany's finance minister and leading industry groups on Wednesday played down the impact of the strong euro <EUR=> on Europe's largest economy.

The euro scaled a record high above $1.60 on Tuesday after hawkish comments from ECB Governing Council members led investors to speculate whether the central bank's next move would be a rate hike rather than a cut.

"The high euro rate has positive effects with regard to import prices," Finance Minister Peer Steinbrueck told reporters on the sidelines of a parliamentary committee meeting in Berlin.

Germany's chambers of industry and commerce (DIHK) said the euro's rise to $1.60 was becoming worrying but pointed out that many companies had taken steps to protect themselves by hedging against the single currency's strength.

"There's no reason to panic," DIHK chief economist Volker Treier told Reuters, adding that the group remained hopeful its forecast for German export growth this year of 6 percent would be achieved.

The BGA exporters' association said the speed of the rise in the euro's value against other currencies was striking, but that it did not expect it to stay at such a high level long-term.

"It is remarkable how robust the German economy is," BGA chief Anton Boerner said, adding that his group was sticking to its forecast for 5 percent export growth this year.

However, if the currency were to rise strongly above $1.63, the BGA would have to rise down its 2009 growth forecast, which it has yet to publish, he said.

By 1100 GMT, the euro was trading at $1.5958.