Euro hits record highs

Soaring food and energy prices have pushed inflation in the 15 European countries in the euro zone to a new high. The March figure is 3.6 per cent. That's the highest in nearly 16 years and higher than analysts expected.

The news will be cheered by Europeans heading across the Atlantic to shop because it's boosted the euro to record highs against the dollar - a euro now worth $1.59.

But for borrowers, the surge in prices badly dents the chances of the European Central Bank following the U.S. central bank in cutting interest rates.

The dollar's lost 15 percent against the euro since September - the decline thanks to steps taken by the Fed to protect the U.S. economy weather the subprime mortgage meltdown.

A gloomy profit picture from JPMorgan Chase after more than five billion dollars in writedowns linked in part to subprime loan losses. America's third-largest investment bank says quarterly profit fell 50 per cent - to $2.37 billion or 68 cents per share from 4.79 billion - $1.34 a share a year ago.

European markets took the news in their stride - nerves had been frayed at the prospect of further fallout from the global credit crunch but JPMorgan's result was better than many expected.

Shares prices kept their gains, the FTSE Eurofirst 300 trading higher.

So too the main European indices.

That weak dollar helped oil to a new record high above $114 a barrel. The price is more than three times the average seen in 2002, when oil's rally began.

Iraqi oil could soon be on its way to European markets. The EU says it's mere weeks away from signing a preliminary energy pact with Iraq. It's all part of the bloc's efforts to reduce its heavy reliance on somewhat unpredictable Russian oil and gas.

Susan Flory, Reuters

surge v. surged, surg·ing, surg·es

v.intr.

1. To rise and move in a billowing or swelling manner.

2. To roll or be tossed about on waves, as a boat.

3. To move like advancing waves: The fans surged forward to see the movie star.

4. To increase suddenly: As favorable reviews came out, interest in the software surged.

dent n.

1. A depression in a surface made by pressure or a blow: a dent in the side of a car.

2. Informal A significant, usually diminishing effect or impression: The loss put a dent in the team's confidence.
melt·down n.

1. Severe overheating of a nuclear reactor core, resulting in melting of the core and escape of radiation.

2. Informal A disastrous or rapidly developing situation likened to the melting of a nuclear reactor core: "After several corporate meltdowns, only two reporters remain in [the] bureau" David Fitzpatrick.

3. Informal An emotional breakdown

gloom·y adj. gloom·i·er, gloom·i·est

1. Partially or totally dark, especially dismal and dreary: a damp, gloomy day.

2. Showing or filled with gloom: gloomy faces.

3.

a. Causing or producing gloom; depressing: gloomy news.

b. Marked by hopelessness; very pessimistic: gloomy predictions.

stride - A step of progress; an advance. Often used in the plural: making great strides in their studies.
fray

tr.v. frayed, fray·ing, frays Archaic

1. To alarm; frighten.

2. To drive away.

mere adj. Superlative mer·est

1. Being nothing more than what is specified: a mere child; a mere 50 cents an hour.

re·li·ance n.

1. The act of relying or the state of being reliant.

2. The faith, confidence, or trust felt by one who relies; dependence.