NewsMine — economy — united-states — 2004 — 2004-jan-mar — Viewing Item

Euro hits new high against dollar { February 18 2004 } Original Source Link: (May no longer be active)    http://www.guardian.co.uk/euro/story/0,11306,1150760,00.html http://www.guardian.co.uk/euro/story/0,11306,1150760,00.html 11.45am update -------------------------------------------------------------------------------- Euro hits new high against dollar Mark Tran Wednesday February 18, 2004 The euro today rose to a new high against the dollar, pushing above $1.29 for the first time in its five-year history. It rose to $1.2927 in early European trading, beating a month-old record of $1.2898. The dollar has been falling against most major currencies over the past two years, following clear signals from the Bush administration that it favoured a weaker currency in order to boost exports and drive growth. Historically low interest rates in the US, and concern about huge budget and trade deficits, have also contributed to the dollar's fall. The drop has been self-perpetuating - the less the currency is worth, the less attraction it holds for investors. Two weeks ago, after a meeting in Florida, the world's seven leading industrialised countries issued a statement on the undesirability of "excessive or disorderly fluctuations". However, in the absence of any concrete action to back up the rhetoric, the dollar has continued to fall because financial markets always tend to test currencies to their limits. The dollar was today weak elsewhere, hitting an 11-year low against sterling beyond $1.91 and setting an eight-year trough against a range of currencies. Some economists believe that the dollar will weaken to $2 to the pound over the next three months. If that proves to be the case, it will be the first time that sterling has been so strong since the UK left the exchange rate mechanism in September 1992. "The market is still trying to push in the direction of $1.30," Christoph Mueller, an economist at DZ Bank in Frankfurt, told Reuters. He added that "there have been no expressions of worry about a particular euro level" from the European Central Bank. "On the ECB's side, the tone is being set that they can live with the euro exchange rate," he said. Jean-Claude Trichet, the ECB president, this week passed up an opportunity to express concern over the euro's strength, leaving markets with the impression that an intervention to stem the currency's rise was not imminent. Mr Trichet refused to go beyond the position on the euro-dollar exchange rate adopted by the G7 this month. There is concern that a strengthening euro could hurt the eurozone's fledgling recovery. Germany's Bundesbank this week called the euro-dollar exchange rate the biggest risk to the German economy, but said that it had so far not been an obstacle to recovery. In a note, Deutsche Bank said that recovery in France was still subject to "significant downside risk" stemming first and foremost from the currency. However the note added that, if recovery proceeds, it will have strength.

Adds fewer jobs than expected Blue chips in the red Bush says sending jobs overseas helps us { February 10 2004 } Data dispite bush rich label for small businesses Dollar hits 11 year low against pound Dollar plunges after us jobs data { March 5 2004 } Dollar slides as consumer data disappoint Dollar slips vs high yielders ahead of trade data Euro hits new high against dollar { February 18 2004 } Fed governor says inflation was too low Fed keeps rates steady calls for patience Gop cheers job increase { April 3 2004 } Greenback slides on lack of fed worries { January 6 2004 } Heineken warns weak dollar will hit profits Inventory levels low show wary business { March 12 2004 } Investors should worry about inflation risks Job growth stalls in february { March 5 2004 } Lack of new job deals blow to us economy { March 5 2004 } Levi strauss zips up last us plants { January 9 2004 } Manufacturing jobs replaced with mcdonalds Manufacturing news disappoints economists Misleading unemployment figures muddled job crisis Mutual fund 40bn inflows 2003 { February 5 2004 } Nasdaq leads surging wallstreet Ny fed warns of risks to us economy Reactions to fed rate left unchanged Real unemploytment rate higher argue economists Senator hollings discusses dangers sending jobs overseas { March 30 2004 } Sluggish job growth threatens recovery { February 10 2004 } States expect budget shortfalls Stocks slip oil prices a worry Treasuries surge as fed ackknowledges jobs gloom Us national debt tops 7trillion { February 18 2004 } Us stocks soar after 5 day tumble Files Listed: 34

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