While regional currencies have been easing against the dollar, in many cases encouraged by governments worried about exports competitiveness, they have actually firmed against the fledgling European currency. The one notable exception is the Indonesian rupiah.

But where is the competition?

On the face of it this might appear bad news, given that 15 to 20 per cent of Asian exports find their way to Europe.

The saving grace for some of Asia's exporters is the lack of substitution by European manufacturers and producers. If you are selling goods in a market where there is no real competition, a small rise in price may not affect trade volumes.

"Who are they competing against?" asked Andrew Fung, regional treasury economist at Standard Chartered in Singapore.

"Exports from Asiato Europe are, on the whole, not in the same kind of industry as the local manufacturers', so I don't think the weakness of the euro will necessarily have much of an impact by way of a substitution effect."

Relative price not an issue

Relative price does not seem to matter much to some Asian exporters either, since Asia's main exports are commodities, like palmoil, rubber, rice and timber.

"It's not just a question of relative price," said Chris Tinker, head of market research at Credit Lyonnais in Hong Kong.

"A lot of Asian exports that go into Europe and the US, and indeed Japan, are commodity-based and are not driven on the basis of marginal price because there is a global price," he said, referring to prices in US dollars.

For basic goods, the relative exchange rate of the Malaysian ringgit, the Philippine peso or Indonesian rupiah is irrelevant because the European markets are buying on a dollar basis.

Margins, not trade figures take the hit

Loss of competitivenessbecause of rising currencies could, however, hit exporter margins if selling prices are held steady in difficult markets. But this would not affect trade volume.

This contrasts with a substitution effect, which feeds through into volumes and is reflected in official balance of trade figures.

Also, the lowest cost manufacturers are in Asia and not Europe or the United States. This means Asia is relatively competitive in anything that is labour-intensive and therefore exchange rate-sensitive.

But some are suffering lower EU exports

Dollar-based exporters and those unaffected by any substitution effect are somewhat insulated from the weak euro.

But some are suffering, and the slowdown in Europe and the weak euro are having an impact.

This tends to be confined to more developed economies, such as Singapore, which export manufactured goods like disk drives and semi-conductors rather than basic goods.

Singapore's domestic exports to the European Union on the basis of a three-month movingaverage percentage change over the same month of the previous year at current prices have shown a dramatic slowdown in recent months.

Weak euro aside, European slowdown will hurt

Analysts said while the actual level of the euro against the Asian currencies was not a huge issue for the region as a whole, its weakness was symptomatic of a more pressing problem, a European economic slowdown.

"Relative price effects on exports to Europe are not as sensitive relative to, say, the US," Said Lindsay Coburn, head of G7 Research for Asia at IDEA in Singapore.

"It's reasonable to think that up the value-added chain, exports like semi-conductors are exposed, but the thing about the euro is the demand effect which is going to be a real dampener."