Business News - Euro at six-month low against U.S. dollar

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Euro at six-month low against U.S. dollar

FRANKFURT, Germany (UPI) -- The euro's value fell to a six-month low against the U.S. dollar Friday, following a warning that inflation in Europe would likely continue.

The euro fell to $1.504 a day after the European Central Bank left its key lending rates unchanged and bank President Jean-Claude Trichet said "annual inflation rates are likely to remain well above levels consistent with price stability."

The shifting values shows that recession worries have traveled across the Atlantic from the United States to the 15-member Eurozone, The International Herald Tribune reported.

"Until now, the severity of Europe's problems have been outweighed by what happened in the United States," Stephen Jen, global head of currency research at Morgan Stanley in London told the newspaper.

The euro reached a record at $1.60 in mid July after the ECB raised interest rates to 4.25 percent -- a move made while most other central banks were lowering a rates.

Some analysts believe the ECB will likely lower rates next year, when inflation in the Eurozone is expected to slow from its current rate above 4 percent to closer to the target rate of 2 percent, the Herald reported.

Copyright 2008 by United Press International

This news arrived on: 08/08/2008

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