Possible War in Iraq will Not Bring about Major Changes in Euro-Dollar Rate

Analysts say a possible war in Iraq will not bring about any major changes in the euro-dollar rate.

According to Anton Struchenevsky, an economist with the Troika Dialogue investment company, the period of the weakening of the dollar against the euro is past, with all the fundamental problems having been resolved. Today, one euro was worth 1.7 dollars, the value that is probably close to the equilibrium level.

A war in Iraq may cause short-term fluctuations, said Mr Struchenevsky. By the year's end, however, the exchange rate will be back to 1.06-1.10 dollars per euro.

Konstantin Trushin, in charge of the money circulation department of Bank TsentrKredit, agreed with the above opinion. "All consequences of a possible war in Iraq have already been facted in the current value of the euro against the dollar," he believes.

When dwelling on a war's impact on the rouble-dollar ratio, Mr Trushin said the predicted drop in oil prices would send the dollar inflow into Russia down. "This will allow the Central Bank to support the dollar. The US currency will most likely be strengthening by 5-10 kopecks a month," opined Mr Trushin.