Slowdown In US Economy Decisive Factor In Resurgence Of Euro
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SG expects a gradual appreciation of the euro over the coming year. There are a number of positive developments that have begun to support the euro, but the underlying health of the US economy means that a rapid return to the euro's starting point of $1.16 is unlikely. SG's forecast is for a rise to 95 cents against the dollar by the end of 2001.
The supportive factors for the euro are:
•The convergence in economic growth rates between the US and Europe. As chart 1 shows, relative growth rates do
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