Euro hits new low of $0.8465 , 90.42 yen
The euro hit new lows against the US dollar and Japanese yen here Wednesday, as investors bet on no intervention from the European Central Bank (ECB) to prop up its battered currency.
The euro hit a record low of $0.8465 around 3:00 p.m. (0600 GMT) in Tokyo, beating its previous low of $0.8475 set just five hours earlier.
The ailing European currency also plumbed a historic low of 90.42 yen, down from Tuesday's previous low of 90.60.
The euro has weakened going into a Group of Seven finance ministers' meeting this weekend, with traders doubtful that the ECB will get any help from the US or Japan to support its currency.
"Expectations of intervention are fading ahead of the G7, as investors predict that policymakers will only talk without taking any action," said Sanwa Bank's vice president of foreign exchange, Mitsuru Sahara.
"Investors are intending to sell the euro down to the 90-yen line," he added.
By 3:45 p.m. (0645 GMT) the euro had recovered a notch to $0.8487 and 90.50 yen.
"There is no one in the market who thinks the G7 will be able to agree on intervention," Asahi Bank dealer Nobuyuki Maenaka said.
"Japan may be in favor of the idea as it is depressed by the yen's strength against the euro," he said.
"But it is very unlikely that the United States will cooperate with the action as (US Treasury Secretary Lawrence) Summers has clearly said there is no change to the country's monetary policy.
"And when there is no consensus even among European nations, how can they take any action?"
The meeting of G7 finance ministers and central bankers in Prague will convene Britain, Canada, France, Italy, Germany, Japan and the United States.— (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)