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Strategies & Market Trends : Bonds, Currencies, Commodities and Index Futures

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To: Chip McVickar who started this subject	1/9/2001 4:34:34 AM
From: friverola	Read Replies (1) of 12410

Euro's Rise Owes More to U.S. Economy Than to ECB(Bloomberg) fxstreet.com The U.S. economy has accomplished what the European Central Bank and its president, Wim Duisenberg, could not do: raise the value of the euro. Only since the U.S. economy began showing signs of slowing has the euro gone back up. It has risen 13 percent against the dollar since Nov. 24, the biggest increase since the currency began in Jan. 1999. As the euro fell 28 percent over the 21 months ending last October, few were as vocal as Duisenberg in declaring the 11- nation currency ``undervalued.'' He and other ECB officials used the word publicly at least 10 times between Sept. 3 and Nov. 20. The ECB bought euros at least five occasions last year to boost its value. And over the course of a year it increased interest rates seven times to curb inflation; higher rates usually raise the value of a currency. By Nov. 24,, the euro was still 84 cents to the dollar, compared with $1.17 at its inception. It is trading at just under 95 cents. The central bank for the euro zone had ``absolutely nothing'' to do with the euro's rise, said Klaus Baader, economist at Lehman Brothers International in London. ``The real driving force for the strengthening has been very much what is happening in the U.S.'' fxstreet.com

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