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To: long-gone who wrote (30160)	3/16/1999 4:42:00 PM
From: goldsnow	Respond to of 116759

Not sure, but much better than that here in Upstate..:) Confidence returns to euro Currency markets have been selling euros The euro has seen its value improve after falling sharply against the dollar following the crisis resignation of the entire European Commission. By close of trade in London, the currency had recovered from sharp overnight losses and was trading at $1.0971. The euro fell by over a cent in trading in the Far East and New York to a low of $1.0816 - close to its lowest level ever against the dollar. It also improved in value against the yen and the pound sterling, moving above £0.67. Despite the improvement, analysts expect the European currency to continue to fall in the months ahead, with one dealer saying he expected the dollar to reach parity with the euro by the end of the year. The currency reached an all-time low of $1.0782 on 4 March. It has been falling steadily since its launch at a level of around $1.18. Euro already weak In three months, the euro has lost nearly 10% of its value. When the single currency was launched in January, it was supposed to be strong and stable, the centrepiece of monetary union. Europe's trade position was strong and it had huge currency reserves. But both political and economic events have conspired to weaken the new currency. The euro has been hurt by the weakness of the European economy compared with the continuing boom in the United States. Exports boost And even before the resignation of the European Commission, the disagreement between the European Central Bank and the former German finance minister Oskar Lafontaine over whether to cut interest rates damaged confidence. "I think we'll probably head towards $1.07. There's a few things at play at the moment: the sheer strength of the US economy, the weakness in Europe," said Patrick Bennett of Warburg Dillon Read. A weak euro could boost European exports, but it could also threaten stability and force the new European Central Bank to raise, rather than lower interest rates to defend the currency, thus hurting economic growth in Europe. Help in the long run Some dealers hope that, in the long run, the scandal could strengthen Europe's political system, which would ultimately help the euro. "The commission was already regarded as incompetent. With this resignation, it's actually like a system cleansing," said a European bank dealer. Former UK Chancellor Kenneth Clarke said he did not believe the crisis would affect the credibility of monetary union. "I don't think the situation has any relevance to the euro whatsoever. The market will react badly for a couple of days, but once the dust has settled they will realise it has nothing to do with the euro," he said. news.bbc.co.uk