Franc at three-month low against mark
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.THE FRENCH central bank was forced to intervene in support of the franc yesterday as gloomy economic news helped to propel the currency to a three-month low against the German mark.
Heavy selling briefly pushed the franc through the psychological level of Fr3.40 to the mark. Its slide mocked the aspirations of those in the French government who believe the franc is on course to supplant the mark as anchor of the European exchange rate mechanism. Edouard Balladur, the Prime Minister, dismissed as ridiculous rumours that France would leave the system altogether.
The French national statistics institute, Insee, said the economy was on course to shrink by 1.2 per cent this year, compared with the government's latest forecast of a 0.8 per cent drop. National output fell by 0.6 per cent in the first quarter of the year.
The gloomy news from France came as receding fears about the German economy helped the Frankfurt stock market to its highest close of the year. The DAX- 30 rose 63.94 points - more than 3.5 per cent - to end the day at 1,783.7. Foreign purchases of German shares helped the mark against the franc.
Alison Cottrell, economist at Midland Global Markets, said the franc's plight might persuade the Bundesbank to cut its Lombard interest rate - the ceiling for market rates - by a quarter point later this month. This would be seen as support for the French, while having negligible effect in Germany.
The pound was little changed. A survey by Dun & Bradstreet showed a rise in British business confidence for the third quarter of the year, at odds with other surveys, which have shown confidence falling back. 'The recovery is gathering steam although it must be judged against the backdrop of the low base of last year's performance,' D&B's Philip Mellor said.
(Graph omitted)
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments