18 October 2002, 15:16  Euro out of favour on concern for Pact, Nice

The euro remains out of favour this morning as the market mulls Romano Prodi's shock remarks and awaits the Irish vote on the Nice Treaty referendum tomorrow The single currency has weakened this week as Wall St rallied and questions about EU rules and flexibility are again raised
While some see the European Commission president's attack on the Stability and Growth Pact as a sign that the eurozone is showing some signs of flexibility, it is also being read as yet another fudge of the issue by the EU. Two of its largest members, France and Germany, are in danger of breaching the rules "To add to the uncertainty, the collapse of the Dutch Government earlier in the week and the Nice referendum in Ireland tomorrow both have the euro under severe pressure," said Niall Dunne, economist at Ulster Bank
The euro is up slightly this morning, at 97.21c from 97.02c overnight, but its upside remains capped ahead of the Nice result. It rose to as high as 98.50c earlier in the week //www.fxcentre.com

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