NEW YORK, Jan 27 (Reuters) - Europe's single currency breached the 99 cent level in U.S. trade against the dollar on Thursday, extending the day's steep declines to touch fresh record lows.

The euro dipped as low as $0.9869, down more than 1.25 percent from Wednesday's U.S. close at $1.0009. The European currency is suffering from the view that Europe's growth prospects are unimpressive in comparison to the United States.

"There's heavy selling pressure in euro/dollar and the euro crosses as well," said a currency trader at a U.S. bank.

The troubled European currency was also down more than 2 percent on the day against the Japanese yen at 103.51 yen, and off 1.25 percent against the British pound at 60.33 pence, a lifetime low.

-- Possible Impact (, January 27, 2000


This is the US playing games with the FX market. These are the last days of the $US as the world's reserve currency. The EURO is its replacement. The US doesn't like it and is trying to make it look weak so that foreigners continue to hold $ denominated debt. The reason for the switch is the US must pay gold to the oil producing nations in exchange for the oil. The supply of available gold to the had been consumed. Gold production is falling while demand hits new records. Gold is very misspriced now. The higher oil prices are a reflection of the inability of the US to deliver gold - the oil producers want higher compensation, hence cut back production. The EURO is 15% backed by gold and will revalue its holding to the market every quarter, The EMU hold 70% of the world's monetary gold. Clinton is desperately tryig to keep the whole mess together as he's created a stock bubble, a $ bubble and he doesn't want this thing to unwind under his leadership. Slick Willy may have to change his nickname soon.

-- Ishkabibble (, January 27, 2000.


You are expressing a viewpoint that at least a few people on this forum have expressed before. I think you are most likely mistaken.

You are correct about the U.S. stock bubble. I think you are wrong about everything else.

Let's make a few things clear: the euro is not backed by gold. The euro is a fiat currency just as the dolar is a fiat currency. A euro cannot be traded for any guaranteed amount of gold.

The European Community has a problematic economic situation which has put pressure on Europen leaders to do something to raise employmnent.

The EC has high marginal tax rates and burdensome business and labor market regulations.

With ever fewer workers to support a ballooning retired population, there is pressure to increase, not cut, labor taxes.

Most likely, the euro will have to swim upstream for another three to four years. Indeed, a huge crash of the U.S. stock market is likely the ONLY thing that will help the euro in the next few years -- assuming the European buuble does not collapse as much as the U.S. bubble.


-- Rick (, January 27, 2000.


I respect your opinion, but I stand behind my own.

check out the early morning thread on USA Gold: Link to article.

-- Ishkabibble (, January 27, 2000.

Ishakabibble: Agree! Fed wants no competition! The dollar is another manipulated market, just like silver and gold. [See and]

-- bz (, January 27, 2000.

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