Euro Falls to Record Low vs Dollar for Ninth Timegreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Euro Falls to Record Low vs Dollar for Ninth Time This Month By Miki Anzai
Tokyo, Sept. 20 (Bloomberg) -- The euro fell to an all-time low against the dollar for the ninth time this month on expectations investors will shift more money to the U.S. from Europe for better returns.
``Europeans have no reason to take their money out of the U.S. unless the euro somehow recovers and reduces returns from U.S. assets in euro terms,'' said Shigeru Hashimoto, a manager for foreign exchange at Sanwa Bank Ltd.
The euro plunged to as low as 84.65 U.S. cents, its lowest level since it debuted in January 1999. It recently traded at 84.98 cents, down from 85.09 cents in New York late yesterday.
The euro has fallen 38 percent against the dollar and 46 percent against the yen since its debut and has become one of the worst-performing currencies, joining company with the Zimbabwe dollar and the Czech Koruna.
More Lows Possible
The euro may fall to 84 cents unless finance ministers and central bankers from the Group of Seven industrialized nations agree to jointly support the currency at their Saturday meeting in Prague, said Yasuji Yamanaka, a foreign exchange manager at Nikko Trust and Banking Co.
``Investors doubt whether ECB officials are truly worried about a weak euro,'' said Hirokazu Note, chief trader at Sumitomo Bank Ltd. ``We have no clues as to what level the ECB wants to raise the euro - whether it's 90 cents of $1 is unknown.''
The 20-month-old currency may extend its declines if a survey by the Munich-based Ifo research institute, due out today, shows an unexpected third month of declines in German business confidence, traders said.
The Ifo index probably rose to 99.5 in August from 99.1 in July, according to the median forecast of 14 economists surveyed by Bloomberg News. Predictions, though, ranged from 98 to 100.
Yen Takes Dip
The yen weakened briefly earlier today after Japanese Finance Minister Kiichi Miyazawa said the government will keep the size of its proposed supplementary budget for the remaining fiscal year at about 4 trillion yen ($37 billion), down from the 6.5 trillion yen extra budget compiled last year.
The yen fell to as low as 107.40 yen. More recently, it traded at 106.96, little changed from 106.99 in New York.
``Three or four trillion couldn't be enough to help the Japanese economic situation,'' said Joe Tsuda, a trader at Dai Ichi Kangyo Bank in Sydney.
The Japanese economy grew 1 percent in the three months ended June 30, compared with 2.5 percent the previous quarter. Some investors fear the economy will slip back into recession without more spending.
In other trading, the dollar was at 1.7776 Swiss francs, up from 1.7767 in New York. The British pound rose to $1.4075 from $1.4091 yesterday.
-- Martin Thompson (firstname.lastname@example.org), September 20, 2000
With the ECB shoving interest rates upward in the face of all these protests and blockades, there is no way they can win. The euro should, as a result, continue to take a beating.
-- Wellesley (email@example.com), September 20, 2000.
I well remember, on another thread, late last year, when a management consultant confidently predicted that the Euro--which started out in January, 1999 at $1.16--would soon be below a dollar. It was. And, look at it now.
-- Uncle Fred (firstname.lastname@example.org), September 20, 2000.