Euro Likely To Remain Uncommonly Low Against U.S. Dollar

By John S. McClenahen Although there's some bullish talk in Europe, prospects are dimming that the euro -- the common currency in 11 of the European Union's 15 countries -- will be trading significantly above US$1 by yearend. The euro has been trading at near record lows against both the U.S. dollar and the Japanese yen this week. Within Europe, fears of rising inflation, the possibility of lower-than-projected economic-growth rates, and insufficient labor-market reforms are being blamed for the euro's fall from US$1.17 when it was introduced in January 1999. Denmark is slated to vote on Sept. 28 on adoption of the euro, and whether or not to adopt the euro figures to be a major issue in Britain's next parliamentary election, expected in early 2001.

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