Euro Hits New Lows Against Dollar, Yen

The Euro hit new lows against the dollar and the Yen on Tuesday, falling to $.9248, as the European Central Bank showed no inclination to take any new measures to support the common currency. It is generally assumed that there will be a small rise in interest rates soon, but these will probably be in line with U.S. and Japanese rates, and therefore will have little effect on the Euro.

Although not yet in use as a daily currency, the Euro rate is applied as the exchange rate in the 11 member countries which share the currency. This is good news for Americans traveling aroad this summer. For the first time in decades they can buy French Francs at over 7 to the dollar and German Marks at over 2 per dollar.

Most analysts concede that the Euro has promoted growth and has been generally a success, but the U.S. economy, and particularly the stock market, has been so strong that the demand for the European currency remains weak. Shares in U.S. companies must lose significant value before the Euro recovers.

Topics USA