Euro hits nearly 16-month high against U.S. dollar
rgs50
Robert G Smith
"Generic Poster" <nob...@cotsebay.cotse.net> wrote in message
news:RDAC1TMJ374...@anonymous.poster...
International News
Euro hits nearly 16-month high
against U.S. dollar as continent's
economy picks up
By TONY CZUCZKA
The Associated Press
5/30/02 1:47 PM
BERLIN (AP) -- The euro soared to a nearly 16-month high against the
U.S. dollar Thursday, buoyed by economic recovery in Europe and worries
about the strength of the U.S. currency.
As the euro extended its recent rally and briefly hit 94 cents to the
dollar
Thursday, the new-found strength of the once belittled currency fed
speculation that the dollar might be in for a longer decline. That
contrasts
with last year, when the euro tumbled as low 84 cents in July.
One reason for the euro's surge is bargain-hunting by U.S. investors as the
global economy revives, said Ian Stannard, senior currency strategist at
BNP Paribas in London.
"We are seeing a recovery start to take place globally," he said. "It looks
as if U.S. investors are starting to look for assets which are undervalued
on a relative basis. On that basis, Euroland assets look good."
Analysts have pointed to growing signs of a European revival in recent
weeks, notably in Germany and France, the two biggest euro economies.
On Monday, a key index of German business confidence showed its fifth
rise in the last six months. Germany's economy, Europe's biggest, grew
by 0.2 percent in the first quarter after a mild recession at the end of
last
year.
Some economists said that while Europe's engine may be revving up, the
euro is actually benefitting from questions about the underlying economic
health of the United States -- which has run up massive foreign trade
deficits during the strong dollar years.
"I don't think it is euro strength, it is dollar weakness," said Lee
Ferridge,
an analyst with Dutch bank Rabobank.
Also pressuring the dollar were a report of weak U.S. consumer
confidence this week and higher interest rates in Europe, economists
said.
A sustained euro rally offers hope of relief to U.S. exporters such as
automakers and farmers, whose products would become cheaper in
Europe. At the same time, it could work against European exports and
raise prices of key dollar-denominated imports such as oil.
The euro's rise is also prompting speculation that the European Central
Bank could raise interest rates to ward off inflation. However, few
economists believe action by the bank is imminent because Europe's
recovery is too fragile, The Frankfurt-based bank sets monetary policy for
the 12 countries using the euro.
Many European economists have long viewed the euro as undervalued and
believe it has slumped too low since its introduction 3½ years ago.
"You could say the euro is returning to a more normal exchange rate
now," said Harmen Lehment, currency analyst at the Institute for Global
Economics in Kiel, Germany. "In the medium term, the euro trend is up
rather than down. The dollar needs to decline a bit further to reach a
level
in line with underlying economic fundamentals."
Dr. Bob
wrote:
>BLASH alias. More babble.
Who is this "BLASH" and why do you claim he is posting under an alias?
I mean, what's the point?
It all seems childish.
Dr. Bob
A psychiatrist says that the gay community would
not run into so much hostility if its members did
not insist on being treated like real people.
Paul Morgan
news:3cf818b0....@news-server.houston.rr.com...
>
> Who is this "BLASH" and why do you claim he is posting under an alias?
>
BLASH404
> I mean, what's the point?
>
You wouldn't understand unless you've been abducted by aliens.
> It all seems childish.
>
It is.
>
> Dr. Bob
>
I got fed up with it and kill filed him. Hate to do that, but it cuts down
on the pointless crap.
....................paul