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Euro Hits Seven Month Low After French EU Vote

by Philip White

Online Stock Market Trading The Euro hit a seven month low against the dollar Monday following France's no vote on the European Union constitution.

Also the May PMI survey of the Euro zone's services sector came in just above expectations at 57.3, month low of 53.1.

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Many experts expected the cut last month, but minutes from the meeting showed that the committee in charge only narrowly voted for it by five votes to four, so the next decision remains uncertain. A Reuters poll of leading economists found their opinion is that interest rates will hold steady this month. More than half of those questioned in the survey believed a cut would eventually come with 36 per cent predicting that the Bank will lower rates in the last three months of the year and a further 36 per believing the cut will come in 2006.

Stock Investing Game May 30, 2005 (AXcess News) Paris - The Euro hit a seven month low against the dollar Monday following France's no vote on the European Union constitution. Though economists say that it could be months before the fallout of France's decision to vote down the EU constitution is felt.

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Journal Prime Rate Street Wall Skeptics had expected stock markets to reel if France, an architect of the European Union, voted down the European Union constitution. But markets took the news in stride Monday with little effect to indices.The Euro fell to $1.2466 in late afternoon trading Monday, a penny below Friday's New York close of $1.2575 in currency trading.

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Stock Market News Trading of euros and dollars were limited as both the US and London stock exchange were closed Monday. In the US, Americans celebrated Memorial Day, the unofficial start of summer and in London, the exchange was closed due to a bank holiday. Had both exchanges been open Monday trading pressures could have pushed the euro lower against the dollar, triggered by computer trading systems that were inactive during the holidays.French Prime Minister Jean-Pierre Raffarin is rumored to be resigning his government post following Sunday's no vote on the EU constitution. Raffarin claimed that France would suffer economic stagnation if the country voted down the EU constitution and that foreign investment would dry up as a result. Aides were packing up their offices Monday, though Raffarin has not publicly said he would step down.

Stock Investing Basics But even though the stock and currency markets didn't over-react, investors are still skeptical about the long-term effect France's no vote on the EU constitution has on the continent. Though the euros drop, if sustained, will aid the EU member countries by reducing the cost of goods and services, both at home and abroad.AXcess News will be reporting on any new market trends related to this story. Members should watch their in-box for late breaking business news. If you're not a member, consider joining now.

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