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 | | Wednesday, 15 August, 2001, 16:59 GMT 17:59 UK Euro pushes higher as dollar wanes  The euro has hit multi-month highs on dollar weakness The euro continued its upward march against the dollar as encouraging US industrial data failed to outweigh the ongoing concerns about the US economy. Figures released on 15 August showed falls in industrial output in July moderating, while inventories began to shrink. But even that boost could not entirely outweigh the ongoing worries about the US economy, after the International Monetary Fund (IMF) warned on Tuesday that a sharp fall in the value of the dollar was possible. The concern saw the euro reach $0.9135 by 1615 GMT, a level last seen in March 2001. Against sterling it also gained, rising slightly to 63.43 pence Deficit worries Economists stressed that the key to the euro's rise is the weakness in the US, not strength in Europe, despite what many see as the increasing chances of a European interest rate cut at the end of this month. The IMF's annual snapshot of the US economy warned that the trade and current-accounts deficits run by the United States were not sustainable in the long term and their size raises "concerns that the dollar might be at risk for a sharp depreciation," the IMF said.
The concerns over the dollar have arisen because the US has been importing far more than it has exported during the past couple of years, the IMF said. The dollar has been unsteady since last week when the Federal Reserve's "Beige Book" report on the economy suggested the US manufacturing recession was spreading to the service sector. Interview pressure But added pressure has come from expectations of a TV interview with US Treasury Secretary Paul O'Neill, due at 2005 GMT. Government spokesmen were at pains to deny that the interview could herald any change in the "strong dollar" policy. But observers said that should Mr O'Neill duck questions about the greenback, that could further drag down the US currency. | |
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