Euro hits record high

16 December 2003

FRANKFURT – The euro continued its upward surge against the dollar Tuesday, with the European Central Bank setting a record-high reference rate of 1.2339 dollars.

The rate was more than one US cent above Monday’s reference rate of 1.2230 dollars.

The dollar equivalent was 81.04 euro cents.

Against other major currencies, the euro was at 70.62 (70.13) British pence, 132.74 (132.09) Japanese yen and 1.5529 (1.5516) Swiss francs.

Money traders said the capture of former Iraqi leader Saddam Hussein at the weekend had given only a temporary boost to the dollar, which continues to be weakened by market fundamentals, chiefly the huge US budget and current account deficits.

The strength of the euro and weaker US data affected German shares where both trade volume and stock movement were slight.

The main DAX index was down 0.80 percent to 3844, the secondary MDAX slipped 0.50 percent to 4430 and the technology TecDAX dropped 2.20 percent to 534 by mid-afternoon.

Among the losses, software concern SAP fell 1.44 percent to EUR 129.45, with stock analysts saying the market was reacting to a fourth-quarter revenues warning issued by information technology company Cap Gemini.

Infineon suffered the biggest drop among DAX issues, losing 3.87 percent to EUR 10.94.

Automobile shares lost ground as a result of the strong euro’s effects on export markets. DaimlerChrysler was down 0.54 percent to EUR 35.30 while BMW lost 0.70 percent to EUR 36.80. Volkswagen held steady at EUR 43.44 after raising long-term sales forecasts.

DPA
Subject: German news