Dollar Reaches New High for Year Vs. Euro

05/20/2005

BERLIN (AP) - The dollar rose to its highest level of the yearagainst the euro on Friday as France reported tepid economic growthand Germany’s ruling coalition looked set to lose key stateelections over the weekend.

The euro, used by 12 EU nations, was trading at $1.2543 in lateEuropean trading after hitting a daily low of $1.2537, down from$1.2639 late Thursday in New York.

That broke the euro’s previous low for the year of $1.2582, setMonday on the back of better-than-expected U.S. economic reportslast week.

The British pound fell slightly to $1.8237 from $1.8349 the daybefore, while the dollar bought 108.23 Japanese yen, up from 107.59yen in New York.

France said Friday its first quarter growth slowed sharplycompared to the fourth quarter of last year, hitting 0.2 percent -below the 0.5 percent increase forecast by economists.

In Germany, Chancellor Gerhard Schroeder’s Social DemocraticParty was gaining ground in polls ahead of Sunday elections inNorth Rhine-Westphalia, the country’s most populous state, butstill lagged the opposition.

With no U.S. economic data being released Friday, traders andinvestors were looking ahead to statements from U.S. TreasurySecretary John Snow on taxation and U.S. Federal Reserve ChairmanAlan Greenspan on energy.

The euro initially fell against the dollar after its 1999 debutand bottomed out at 82 cents in October 2000. It surged from about$1.20 in September to an all-time high of $1.3667 at the end ofDecember on concerns about the U.S. trade and budget deficits.