Euro resists European turmoil

Euro resists European turmoil

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Despite an increase in political upheaval in the eurozone, the euro held its own on Monday as it rose a fraction in relation to the US dollar, up to $1.2568.

The euro held the status quo against sterling at £0.6868, and it fell in relation to the yen, but only 0.3 percent to ¥135.36.

Among the factors influencing the political climate were a call for early elections in Germany and polls showing that both France and the Netherlands look likely to reject the EU constitution in upcoming votes.

However German equities rose on the belief that the early election will drive chancellor Gerhard Schröder from office and speed economic reforms.

On the negative side for Turkey, the prospect of a “no” vote from France on the EU constitution and the possibility of a resulting slowdown of Turkey’s entry into the EU sent the new Turkish lira down 0.5 percent to TL 1.7365 in relation to the euro.

Meanwhile, the US dollar stayed close to recent highs even though it fell 0.4 percent against the yen to ¥107.77, declined 0.1 percent against sterling to $1.8268, and was down 0.6 percent to C$1.2588 in relation to the Canadian dollar.