The problem with that reasoning is that Germany cannot export unless there is a buyer. The US consumer is the buyer of choice for Europe and even more so for Japan and the rest of Asia. The stronger dollar hurts the US consumer (slower economy, higher prices) so it hurts Germany and the rest more than it helps.
Zeev, you forgot France, they came out with -0.3% Q2 GDP growth a couple of days ago. Eurozone industrial production is down YoY. German orders for machinery declined 3% YoY for the first half, they declined 6% YoY for the second quarter and they were down 9% YoY for the month of June. One could argue that the decline accelerates. German insolvencies are up 25% YoY for the January-May period.
For the dollar it could be a struggle between downward pressure because of the twin deficits (fiscal/trade)and upward pressure because Europe goes in the toilet.
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