Dollar low wipes Bundesbank profit

The appreciation of the euro against the dollar may have whittled the German central bank’s 2004 profit down to nothing, Handelsblatt newspaper reported.

Every cent the euro rose above its final 2003 exchange rate against the dollar knocked €250 million from profit, the paper said, citing Bundesbank calculations. The euro closed at $1.3621 on December 31, 10 cents higher than at the end of 2003, the paper said.

The euro’s gains would therefore eliminate the €2 billion in Bundesbank profit that Finance Minister Hans Eichel had expected to add to Germany’s 2005 budget, the paper said.