Euro Drops After Three Banks Cut Forecast for Region's Currency
Published:
12 March 2004 y., Friday
The euro declined in Asia after Goldman Sachs Group Inc., Morgan Stanley and ABN Amro Holding NV said they lowered forecasts for the common currency against the dollar amid signs Europe's economic growth is stalling.
The three banks, which together account for about 13 percent of the $1.2 trillion-a-day global currency market according to Euromoney magazine, said the euro will be worth less in June than they previously predicted. Goldman also trimmed its estimate of the euro's value versus the yen.
As at 11:25 a.m. in Tokyo, the euro fell to $1.2317 from $1.2355 late yesterday in New York, according to EBS prices. It dropped to 136.43 yen from 136.85. The Bank of Tokyo-Mitsubishi expects the euro to fall to $1.20 by the end of June.
German industrial production declined in January, a report on Tuesday showed, the fourth report in the past two weeks to indicate Europe's largest economy is struggling. German unemployment rose last month and business confidence fell. Factory orders declined for the first month in eight in January.
Goldman reduced its three-month euro forecast to $1.20 from $1.26 and Morgan Stanley pared its euro forecast for the end of June to $1.19 from $1.25. ABN Amro lowered its prediction to $1.30 in three months from $1.33 and to $1.23 from $1.33 in six months.
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