NewsMine — economy — united-states — 2003 — 2003-may-june — Viewing Item

Dollar falls lower to euro { May 2 2003 } Original Source Link: (May no longer be active)    http://www.iht.com/articles/94979.html http://www.iht.com/articles/94979.html Copyright © 2003 The International Herald Tribune | www.iht.com Dollar falls even lower versus euro Eric Pfanner IHT Friday, May 2, 2003 LONDON The U.S. dollar tumbled to a four-year low against the euro Thursday, as weak economic data, low interest rates and the ballooning U.S. deficit spurred investors to continue seeking higher yielding currencies elsewhere in the world. The euro surged to $1.1230 on Thursday, up from $1.1100 on Wednesday, pushing it to within about 5 cents of the level at which the single currency was introduced in January 1999 but had never regained in the four years of its existence. The dollar has plunged 2.5 percent against the euro this week alone. Yet the net inflow of foreign money invested in U.S. securities in February fell to roughly half the $1.5 billion a day level needed to balance the U.S. trade imbalance, the lowest rate in a year, according to the U.S. Treasury. ‘‘Foreigners appear to be questioning the relative attractiveness of U.S. assets,’’ said Rebecca McCaughrin, an economist at Morgan Stanley. Analysts say there are several reasons why global investors, who poured money into the United States during the market bubble years, are getting cold feet. After a series of scandals over U.S. corporate accounting and brokerages’ practices, trust in American financial markets remains shaky, some analysts say. U.S. interest rates, pushed aggressively lower by the Federal Reserve in an effort to stimulate economic growth, are far below European levels, reducing the appeal of U.S. bonds. Foreigners in February sold a net $5 billion of U.S. Treasuries, and $8.6 billion in securities issued by U.S. government agencies. Analysts say central banks around the world are also starting to shift a greater portion of their reserves into euros and out of dollars. Given those issues, the nearly $600 billion U.S. current-account deficit now looks to many investors like a heavy burden. ‘‘The argument that the dollar should be strong because U.S. policy makers are more flexible and growth-oriented than their European or Japanese counterparts does not make sense,’’ said Alex Patelis, currency strategist at Merrill Lynch. ‘‘It is not a matter of growth.’’ Meanwhile, according to Morgan Stanley, U.S. investors are adding to their international holdings. Copyright © 2003 The International Herald Tribune

318b congress tax cut { May 22 2003 } California borrow record 11b { May 2 2003 } California near financial disaster { June 30 2003 } Consumer spending dips { May 15 2003 } Deflation like great depression { June 20 2003 } Delfation fears grow { May 16 2003 } Delfation fears Dollar falls lower to euro { May 2 2003 } Dollar stable but sick { May 12 2003 } Dow surges 9000 Ehrlich withholds maryland funding { June 26 2003 } Fed cuts to halt deflation { June 24 2003 } Fed rate cut one percent { June 25 2003 } Fed rate unchanged { May 6 2003 } Fed ready 45 year low rate cut Fed refuses to print money Greenspan hits back at buffett warnings Insiders stock selloff { June 8 2003 } Job market worst since 1990 { June 17 2003 } New hyper bull market by small investors { June 22 2003 } Prices decline deflation fears Rate cut steepen dollar slide { May 21 2003 } Sars might ease deflation { May 9 2003 } States horrid budget struggle { June 26 2003 } Stock losses 100 000 fewer millionaires { June 11 2003 } Stocks drop terror madcow fears { May 20 2003 } Stocks fall dow below 9000 { June 10 2003 } Stocks rise cisco sun { May 12 2003 } Tech jobs moving over seas { May 19 2003 } Us cut 6000 airport screeners Files Listed: 30

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