Despite Analysts' Warnings, No Attack On the French Franc Has Materialized
Only a month ago, analysts were warning that the French franc was heading into another crisis.</br></br>The currency was weakening, unions were threatening a wave of strikes and the government's still-undisclosed 1997 budget was being dismissed as unrealistic.</br></br>Now, two days before the government formally unveils its budget, the blistering attack on the franc is nowhere in sight. Moreover, most analysts now say it probably won't ever come. The mark ended European trading Friday at 3.4115 francs, down sharply from highs a week earlier of around 3.43 francs.</br></br>"It's all over," says Graham McDevitt, senior bond strategist with Paribas Capital Markets in London and one of those who had been betting on a brutal autumn.</br></br>To be sure, foreign-exchange-market sentiment can swing just as abruptly in the other direction. Were the U.S. dollar to suddenly weaken, the franc could fall against the mark, analysts say. Or a unilateral slowdown in the French economy could result in fiscal holes that are just too big for markets -- and politicians -- to ignore.