talking heads paid astronomical salaries and still are clueless .......
The euro may drop to $1.08 per euro and 121 yen in 12 months, Englander said.
U.S. Jobs Growth
Since rising to a record $1.1933 on May 27, the euro has weakened as the region's economy headed toward recession. First- time jobless claims in the U.S. fell to their lowest since February, more evidence growth is accelerating, while signs of a revival in Japan have pushed the Nikkei 225 Stock Average above 10,000 every day this week.
A government report yesterday showed France's economy unexpectedly contracted in the second quarter. The economy of the dozen nations sharing the euro also shrank in the same period as a stronger euro hurt demands for European exports, a revised European Union report may show next month.
``People think they can get higher returns in the U.S. than in Europe, which is why they are starting to shift capital from one region to the other,'' said Alejandro Urbina, a currency strategist in Chicago at Banc One Capital Markets ``There's more positive news coming out of Japan,'' boosting demand for yen.
The euro may drop to as low as $1 within a month, said Urbina, who worked at the Federal Reserve Bank of Chicago. UBS AG, the largest trader in the foreign exchange market, according to Euromoney magazine, today forecast the euro will weaken to $1.09 per dollar in a month, compared with its previous prediction of $1.16. The currency will trade between $1.05 and $1.13 in the next three months, according to Daniel Katzive, a currency strategist for the bank.
Banc of America Securities LLC maintained yesterday's forecast the dollar would reach $1.09 by year-end, according to Lauren Germain, a strategist at the bank. It had forecast $1.21. ....................
`Growth Currency'
Foreign holdings of U.S. Treasury and so-called agency debt rose by a daily average of $6.4 billion in the week ended Aug. 20, according to the Federal Reserve.
``The dollar is seen as the growth currency,'' said Neil Parker, a currency analyst in London at Royal Bank of Scotland Group Plc, the most accurate currency forecaster in the second quarter according to a Bloomberg survey of 52 companies. ``We've seen a catastrophic drop in euro-yen because Japanese investors are disappointed with their European investments.''
Japanese investors sold 521.1 billion yen ($4.4 billion) in overseas bonds, and sold 17.4 billion yen in overseas stocks in the week ended Aug. 15, government figures released today showed. German government bonds maturing in more than a year have shed 1.45 percent in the past three months. Japan's benchmark Nikkei 225 stock index has gained 30 percent in the same period.
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