The euro is breaking all records, and the dollar is losing ground. It cannot be said that this news pleased Russia.

On Wednesday, the dollar-euro exchange rate fell by almost two more cents, to its lowest level since February 2000 and amounted to 99 cents per euro. This trend is observed both in the international Forex market and in the Asian markets. The day before, US President George W. Bush spoke about the fall of the dollar. He said the dollar would depend on the stock market and the US's ability to cut spending. Obviously, market participants do not really believe that Washington is seriously concerned about the situation and is going to do anything at all, so the statement of the American president only contributed to a new weakening of the American currency. There is another important indicator for the market - the consumer confidence index in the United States. It is now also falling, almost as rapidly as after the terrorist attacks in New York. Analysts consider this a signal of a slowdown in the growth rate of the American economy.

According to observers, the American company World Com, one of the world's largest communications corporations, is also to blame for the fall of the dollar and the strengthening of the euro, which through its actions led to a fall in the quotations of American companies and stock exchange indices in the United States and Europe. The dollar began to be urgently sold after World Com announced the results of an internal audit that revealed violations of accounting standards - $3.8 billion of ordinary expenses were counted as capital investments. As a result, the losses of the largest long-distance telephone operator turned out to be underestimated. The World Com accounting scandal threatens to become one of the largest fraud cases in US corporate history.

The Europeans themselves were surprised by the current success of the European currency: they expected the euro to strengthen only by the end of the year. New calculations by Old World economists suggest that the euro may well reach parity with the dollar by the end of this week. However, in this case they can be reproached for being too optimistic. As Dmitry Sudakov, an analyst at the Barrel investment company, told Vesti.Ru, “ it was not the growth of the European economy that led to the growth of the euro, but the troubles of the American economy, and besides, Europeans also do not really benefit from the success of the new currency, since as a result their goods become more expensive .”

Now no one undertakes to predict the future fate of the market. Dmitry Sudakov believes that the only thing we can say with certainty is that negative news from the United States will most likely continue to arrive, and the euro will rise in connection with this. Meanwhile, economists are arguing about what impact the decline in the dollar will have on the global economy. IMF experts warn that the weak dollar could hamper its recovery. According to another opinion, the negative impact of the low dollar exchange rate will affect only in the short term.

However, both the current significant decline in the American currency and the growth of the European currency are extremely unpleasant for Russia. The head of the Central Bank, Sergei Ignatiev, bluntly stated: “We are strangers at the euro festival.” Thanks to the fall of the dollar, the real exchange rate of the ruble is growing (according to the calculations of the head of the Central Bank, by the end of the year this growth could be 4-6 percent). However, due to the fact that the euro is strengthening much faster than the dollar (since the beginning of the year, the rate has already increased by 7.6 percent), Russia's gold and foreign exchange reserves have depreciated by about $2.5 billion, according to presidential economic adviser Andrei Illarionov. In this regard, he once again called for completing the payment of external debt as quickly as possible. The Central Bank's gold and foreign exchange reserves are 90 percent dollars, but the Paris Club of creditors, for example, has to be paid in euros. This also applies to Russian companies and banks, as well as the population, which still prefers the American currency: no more than 10 percent of Russians’ foreign currency deposits are denominated in euros. According to Barrel Investment Company analyst Dmitry Sudakov, both the Central Bank and the population should think about converting their foreign currency assets into euros.

In addition, the strengthening of the euro against the American currency reduces the country's trade balance by $5-6 billion. Retail prices for goods imported from Europe will rise, and Russian exports are denominated in dollars. According to the Vedomosti newspaper, we can expect the first devaluation of the ruble against the euro in history. Perhaps the only thing that can help Russia at least a little to maintain the balance of trade and payments is a slight increase in prices for gold and oil, which is facilitated by the fall of the dollar. But this situation cannot last long.

Lenta.Ru: The euro exchange rate against the ruble increased by 52 kopecks

WE ARE STRANGERS AT THE EURO CELEBRATION