Value of Euro Rises as Yeltsin Calls for G-8 Meeting on Kosovo April 1 (Bloomberg) -- Euro money-market rates fell after European Central Bank member Arnout Wellink said growth in the single currency region may be slower than official forecasts, buoying hopes for a reduction in interest rates. Wellink, a member of the ECB's governing council that determines rate levels, said the 2.2 percent estimate for this year's growth is ``still on the optimistic side.'' The European Commission scaled back its previous estimate of 2.6 percent this week ... Traders and investors got further evidence of slow growth in the euro 11 this week. The European Union's executive agency forecast that the Germany economy will expand at 1.7 percent in 1999 while the Italian economy will grow at a rate of 1.6 percent. Wellink was the latest in a series of ECB officials to acknowledge the dangers threatening the euro-11 economies. The steady stream of commentary in the past week has primed the markets for a cut, driving money market rates to all-time lows. The 11 nations of the euro area are France, Spain, Portugal, Italy, Germany, Austria, Belgium, the Netherlands, Luxembourg, Ireland and Finland. The 15-nation EU includes the euro members plus the U.K., Denmark, Sweden and Greece. The dollar rose against the yen after Eisuke Sakakibara, Japan's vice finance minister for international affairs, said a strong yen was ``undesirable.'' The yen's 13 percent gain in the last six months has hurt efforts to lift Japan's economy from recession ... The euro gained against the dollar after Russian President Boris Yeltsin called for an emergency meeting of the Group of Eight industrial nations to try and end the fighting in Yugoslavia. The euro rose to $1.0791 from $1.0762 ... ``Any hint of a cessation of hostilities is euro positive,'' said Fernando Medina, senior currency trader at Banco Atlantico. Still, ``the NATO allies are intent on bringing (Yugoslav President Slobodan) Milosovic to his knees. Until that happens, I don't see a significant move up in the euro.'' Still, Europe's single currency remains vulnerable to any signs fighting will be protracted, traders said. ``It's getting worse if anything,'' said Jan Erik Warneryd, chief proprietary trader at Skandinaviska Enskilda Banken. ``I don't think Russia is going to play an important role'' in reaching a resolution ... ``From a public sentiment standpoint, having U.S. prisoners of war is bearish for the dollar,'' said Dan Bernzweig, a trader at Bank Leumi U.S.A. Further gains in the euro are also unlikely as signs of low inflation and slowing growth fanned expectations the European Central Bank may cut interest rates next week, lowering the return on euro deposits. ``You have another day which underlines the differing growth prospects for Europe and the rest of the world,'' said Skandinaviska's Warneryd. ``Fundamentals if anything should push euro lower.'' Elsewhere, the British pound fell to $1.6056 from $1.6112 yesterday as a survey showed the U.K. manufacturing industry is still in recession.. The U.S. currency was little changed at 1.4812 Swiss francs from 1.4822 francs and at 1.5044 Canadian dollars from 1.5063 dollars. 11:58:16 04/01/1999 Pro-Euro Pressure Group Says Poll Was Biased London, April 1 (Bloomberg) -- An opinion poll published yesterday showing that nearly 60 percent of U.K. businesses oppose participation in the euro was called ``misleading'' by business organizations and Britain in Europe, a pro-euro pressure group, the Financial Times said. The Confederation of British Industry and British Chambers of Commerce said the poll, conducted by ICM and commissioned by Business for Sterling, misrepresented their members' views as it was heavily weighted towards the opinions of small businesses employing fewer than 10 workers. Small firms make up 95 percent of Britain's employers while accounting for just 23.1 percent of U.K. sales, the newspaper said. The combined economy of the 11 nations that adopted the euro this year is likely to expand less than previously thought because of dwindling exports to Asia and Latin America, the European Commission said yesterday.
