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To: Pogeu Mahone who wrote (257163)	8/22/2003 7:45:07 AM
From: Pogeu Mahone	Read Replies (1) \| Respond to of 436258

August 22, 2003 Euro's Steep Drop Accelerates Against the Dollar and the Yen By BLOOMBERG NEWS y Bloomberg News The euro tumbled against the dollar and the yen yesterday amid evidence that the economies in the United States and Japan are accelerating even as the 12-nation euro region struggles to recover from recession. The decline extended the currency's slide this quarter to 4.8 percent against the dollar and 6.5 percent against the yen. A surge in the euro over the last year had hurt demand for European exports, contributing to the slowdown in growth. "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," increasing demand for yen, he said. In New York, the euro settled at $1.0930, down from $1.1122 on Wednesday. It fell as low as 128.85 yen, more than 2 yen below yesterday's close. Since rising above $1.19 in late May, the euro has declined as the region's economy has headed toward recession. First-time jobless claims in the United States fell to the lowest level since February, more evidence that growth is accelerating, as signs of a revival in Japan have pushed the Nikkei 225-stock index to close above 10,000 every day this week. The euro may drop to as low as $1 within a month, Mr. Urbina said. UBS, the largest trader in the foreign exchange market, according to Euro-money magazine, forecast yesterday that the euro would weaken to $1.09 in a month, compared with its previous prediction of $1.16. Banc of America Securities reduced its year-end forecast to $1.09 from $1.21. "The dollar is seen as the growth currency," said Neil Parker, a currency analyst in London at the Royal Bank of Scotland Group. "We've seen a catastrophic drop in euro-yen because Japanese investors are disappointed with their European investments." Copyright 2003 The New York Times Company \| Home \| Privacy Policy \| Search \| Corrections \| Help \| Back to Top