Business Briefs

Euro reaches four-year high against dollar

The euro rose above its initial value versus the U.S. dollar for the first time in four years on Friday. After months of gaining against the greenback, the euro broke through $1.18 after earlier breaching its debut price of $1.1747 set on January 4, 1999. "The trend for the euro is clearly pointing upwards," one currency trader told the Reuters news agency. The euro’s rally has brought mixed feeling for the 12 euro-zone countries, who are happy to see the euro develop as a world reserve currency, but fear its rise could hurt Europe’s economy as its exports are made more expensive abroad. The euro hit its lowest point against the dollar in October 2000 at $0.8225, forcing the European Central Bank to intervene on foreign exchanges to prop up the beleaguered currency.

German inflation slows

As the cost of heating oil sank, German consumer prices dropped 0.2 percent from April to May. According to preliminary figures released on Friday by the Federal Statistics Office, annual inflation in May dropped to 0.7 percent – the lowest level since October 1999 – from 1.0 percent in the previous month. The fall in the price of heating oil and other energy products is partly due to the continuing rise of the euro versus the U.S. dollar, since most petroleum products are dollar denominated.

German bankruptcies up in February

Numbers released by Germany’s statistics office on Friday show that German corporate bankruptcies increased 3.8 percent in February from the same month a year ago. More than 3,000 firms filed for insolvency in the month as growth in Europe’s largest economy ground to halt. Bankruptcies in January and February combined were 11.1 percent higher than for the same period a year ago. Total bankruptcies for the first two months of the year, including those filed by individuals, surged 31.6 percent to 15,966.