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Euro
sinks to new low against dollar for second consecutive day |
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News |
April 22, 2000
NEW YORK, APR 21 (AP) - The euro fell to a new low Thursday for the second consecutive session as the dollar staged a broad advance against major currencies in quiet dealings.
The single currency adopted last year by 11 European currencies sank as low as 93.55 cents in afternoon trading in New York, just beneath the low of 93.57 cents set Wednesday.
In late New York trading, the euro recovered to 93.82 cents, but that was down from Wednesday's late rate of 94.04 cents.
In other trading, the dollar was quoted at 105.73 Japanese yen, up from 104.78 yen late Wednesday; 1.6753 Swiss francs, up from 1.6688, and 1.4748 Canadian dollars, up from 1.4742. The British pound fell to dlrs 1.5793 from dlrs 1.5813.
Traders pushed the euro to a new low in part because they see little risk that European authorities are going to defend the currency.
Caleb David, who watches currency movements for Bank Julius Baer and Co.'s New York office, said the European Central Bank "hasn't done a very good job of talking their currency up" as it has sagged in recent weeks.
"They have said `We are not going to intervene' for all intents and purposes. You have to provide the market with a little fear factor (about intervention) and they haven't done that," David said.
He said European authorities may be divided about supporting the euro because the economy depends on export growth. A stronger currency could curb sales abroad by making European products more expensive for outsiders.
"The euro can't seem to sustain a recovery, and that leaves the foreign exchange markets to batter it and see how far they can push it," David said.
The dollar, on the other hand, weathered last week's late rout in stock prices and has benefitted as U.S. stock prices have recovered somewhat this week amid signs that the economy continues to grow.
David noted Thursday's moves came in light dealings ahead of the Easter weekend. Many European financial markets will be closed on Friday and on Monday.
Currencies of the 11 countries participating in the euro are no longer traded separately and are tied to the euro by a fixed rate. Based on Thursday's euro rate, the dollar was worth: 2.0842 German marks, up from 2.0796; 6.9902 French francs, up from 6.9749; and 2,063.37 Italian lire, up from 2,058.86.
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