When a fragile recovery did occur in 1999, it was choked by an unavoidable currency appreciation.

Further, for euro borrowers, currency appreciation will also inflate a company's reported net debt position in sterling, giving it less headroom under its existing borrowing facilities.

The currency appreciation has also pushed down sales to tourists at department stores, which had contributed to consumer spending in recent quarters.

This currency appreciation occurs as the importing country sells its currency to buy the exporting country's currency used to purchase the goods.

Often used by (initially) high-inflation countries or developing nations who peg to low inflation countries in attempt to avoid currency appreciation.