LONDON, NOV 26: The euro plunged to new lows below $1.01 on Friday, weakened by market doubts about the credibility of European economic policy-makers. After clinging to a narrow ledge above the previous all-time low of $1.0104, the euro suddenly let go at 1130 GMT. The single currency steadied after hitting bottom at $1.0076, but for many traders it was only a matter of time before it sank below $1.00.Against the yen it chalked new life time lows below 105 and also fetched a record low 62.70 pence in the British pound.
"The major problem for now is the credibility, which is not very high in terms of European politicians and the ECB," said Michael Rottmann, currency strategist at Hypo Vereins Bank in Munich. Bank and media merger news, as well as a continued bull run in technology and telecom shares, took European share indices confidently higher by midday.
ECB board member Eugenio Domingo Solans said on Thursday the central bank had no intention of intervening in the foreign exchange markets to defendthe euro. The ECB's chief economist Otmar Issing, in contrast, said that central banks should not flag intervention but keep speculators guessing until after the event.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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