The Week That Was: Winners and Losers in Financial Chaos

Europe’s currency crisis smashed unity hopes and left dramatic imprints on key nations and their financial markets this week. A look back:

* BRITAIN: The center of the currency crisis this week, Britain saw the value of its pound plummet to $1.73 by Friday, from $1.93 a week ago, after deciding on Wednesday to stop supporting the currency--a blow to European unity. But in many ways Britain was the week’s big winner: Free to reduce interest rates once the pound was let go, the government fueled hopes of economic recovery. The Financial Times-100 stock index shot up 105.6 points Thursday and 83.10 points Friday to close at 2,567.00, up 8.2% for the week.

* GERMANY: The German interest rate cut on Monday had cheered markets worldwide, but within hours of the cut many analysts slammed it as too little, too late to help weaker European nations. The currency crisis soon followed. By Friday, most European currencies continued to plunge while the mark grew stronger, and the Germans remained adamant about their interest rates. Still, the Frankfurt stock market rose 4% for the week, hoping for further rate cuts eventually.

* FRANCE: Against the odds, the Paris stock market continued to gain on Friday, anticipating a “yes” vote in Sunday’s European unity vote--which could help end the crisis. The CAC 40 stock index rose 4.5% for the week. But speculators continued to push down the value of the franc: It closed at 5.130 to the dollar Friday, versus 5.065 Thursday and 4.893 a week ago--an effective loss of 5% in French purchasing power.

* UNITED STATES: As a bystander to Europe’s crisis, America won by default. Many traders continued to pile into the dollar for safe haven, fearing that a French rejection of the European unity treaty will mean a further collapse of most European currencies next week. The dollar even gained against the powerful German mark, closing at 1.504 marks on Friday, up from 1.479 on Thursday and 1.440 a week ago. But U.S. stocks trailed their European counterparts for the week: The Dow Jones industrials posted a net gain of just 0.6%.