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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Kenneth E. Phillipps who wrote (684210)	6/1/2005 11:32:37 AM
From: Hope Praytochange	Read Replies (1) \| Respond to of 769670

kennyboy suggested/posted in ajn 2005 that the arabs would convert their petrodollars to EURO !!!! Euro Slides to Eight - Month Low Vs. Dollar By THE ASSOCIATED PRESS Filed at 11:01 a.m. ET FRANKFURT, Germany (AP) -- The euro slid to its lowest level against the dollar in eight months on Wednesday, as expectations the Netherlands would reject the EU constitution in a referendum intensified doubts about European integration. Economists said the euro likely would recover in the medium term as persistent worries about the U.S. trade and budget deficits return to haunt the dollar. The euro fell as low $1.2224 in European trading before climbing back to $1.2242, still down from $1.2312 in New York late Tuesday. The currency was pushed down in part by an unsourced report in the German weekly Stern that a possible failure of the monetary union was discussed at a meeting last week attended by Germany's finance minister and central bank chief. Both the ministry and the bank quickly dismissed as ''absurd'' the idea that the euro could one day break down, but the report jangled markets already unnerved by the constitution's defeat in a French referendum Sunday. The Dutch voted in their first national referendum on the proposed constitution Wednesday. Polls indicated almost 60 percent will choose ''no.'' ''Over the near term, if the poor performance of Europe's economies prevail, we might see the euro moving down farther,'' said Lorenzo Codogno, co-head of European economics with the Bank of America in London. ''But that should only be a temporary situation.'' Instead, said Carsten Fritsch, a currency strategist with Commerzbank, the euro could recover to $1.30 by the end of the year because of concerns about the twin U.S. deficits. ''The U.S. deficits are still there and there's no improvement expected there anytime soon,'' he said. ''The Fed is coming to the end of its rate hikes cycle and industrial survey activity there is deteriorating.'' If the Fed stops increasing its key interest rate -- currently at 3 percent after eight increases since June 2004 -- that likely would trigger a renewed focus on U.S. structural deficits. And the euro has proven resilient over time. It dropped against the U.S. currency after its 1999 introduction, bottoming out at 82 U.S. cents in October 2000, but surged to an all-time high of $1.3667 at the end of last year. Jeremy Stretch, a senior currency strategist with Rabobank in London, described the Stern report as spurious, but said that ''with sentiment regarding the euro being so fragile, anything of that nature will push it down.'' Weak euro zone manufacturing data was another culprit, he said. The NTC Research Eurozone Purchasing Managers' Index fell to a 22-month low of 48.7 in May, down from 49.2 the previous month, and below a forecast result of 49.0. ''It's going to be another nail through the EU constitution,'' Stretch said. ''It's endemic of the political and economic paralysis that seems to be gripping the euro zone.'' Still, the head of the European Central Bank, Jean-Claude Trichet, expressed confidence in the euro Tuesday, saying he was ''absolutely sure the euro zone will overcome its present difficulties, as it has in the past.'' While fears over European integration are on the minds of currency traders, the larger issue, analysts said, is not the continent's unity. ''The big failure is the poor performance of the economy,'' Bank of America's Codogno said. ''You can't blame the euro for that. You have to blame poor economic policies implemented by European governments.'' In other trading Wednesday, the British pound fell to $1.8125 from $1.8179. The dollar was marginally higher against the Japanese yen, climbing to 108.59 from 108.50 yen.