America"s Federal Reserve cut interest rates by another quarter-point, to 3.75 %. Wall Street, which had been
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for a sixth half-point cut, was disappointed. The Dow fell by 2%
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the week. The past week"s economic statistics gave mixed signals. Exports dropped by 2% in both March and April, largely
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a decline in high-tech investment
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;the merchandise-trade
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widened to $ 458 billion in the 12 months
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April.
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,the Conference Board"s index of consumer confidence was higher than
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in June.
Concerns
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inflation in the Euro area
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. Preliminary data
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that German consumer price inflation fell to 3. 1% in the year to June, from 3.5 % in May; wage growth
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to 1.4% in April, a real pay cut of 1.5%. Some economists fear that Germany is on the
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of recession. The IFO index of business confidence dropped more
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than expected in May, and the institute has cut its forecast of GDP
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this year to only 1.2% ,well below the German government"s forecast of 2%.