BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 

Wednesday, 9 August, 2000, 10:38 GMT 11:38 UK
Euro teeters on new low
Euro trading desk
Investor confidence in the euro is shaky
The euro hovered close to fresh lows on Wednesday.

The currency was still reeling from a clutch of data on Tuesday, which reinforced investors' belief that US markets are a better place to put their cash.

In Japan, expectations are growing that the central bank may raise interest rates at a meeting on Friday.

This has encouraged investors to switch their money into the yen, dealing a further blow to the euro.

It fell to a low of $0.89 in early trade on Wednesday, its weakest since 25 May and little more than a cent above the record low set earlier in May.

"There's just no reason to buy the euro here," said one Japanese dealer.

US productivity surge

On Tuesday, the US government announced that productivity jumped 5.3% in the second quarter of this year - its fastest rate of growth for 17 years.

The figures suggest benign inflationary pressures, weakening the case for further rises in US interest rates. They also indicate that the economy may enjoy a 'soft landing'.

Masaru Hayami
BoJ governor Hayami wants to raise Japanese rates
This, combined with German unemployment data showing that unemployment wasn't falling by as much as expected, encouraged traders to sell the euro.

Japan's interest rates have been at zero for several months and Bank of Japan governor Masaru Hayami now thinks the time is right to raise them again.

But he faces political pressure to keep rates unchanged.

Prime Minister Mori fears a rate rise could cripple the fragile recovery.

"I would like them (BoJ) to fully consider that the economy is at make-or-break point," he said.

Search BBC News Online

Advanced search options
Launch console
BBC RADIO NEWS
BBC ONE TV NEWS
WORLD NEWS SUMMARY
PROGRAMMES GUIDE
See also:

25 Apr 00 | Business
Q and A: Euro currency slump
27 Apr 00 | Business
Europe and the euro
20 Jul 00 | Business
Europe gets cheaper
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories