Friday, May 20, 2005

Euro falls as French economy goes south.

EU: Via Financial Times.

The euro dropped on Friday to a seven-month low against a resurgent US dollar as French economic growth fell short of expectations and investors fretted about the political turmoil that could result from three critical European votes over the next 11 days. The French economy expanded by a smaller than expected 0.2 per cent in the first three months of the year, increasing concern about the fragility of the eurozone economy. Europe's second-largest economy had been expected to grow by 0.5 per cent in the first quarter. Julian Callow, economist at Barclays Capital, said: “Investors are recognising that the euro does not have a happy set of fundamentals supporting it. The economic news is crumbling and political tensions are rising.”
Investors are about a year and a half late.

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