The euro dropped against the dollar as the European Union constitution was dumped in the French referendum. The rejection that will hamper the adoption of the document supposed to pave the way for integration of the European economies had a downward effect on the European currency.

The euro was dragged down against the yen British pound on realization that the negation of European integration prospects by French voters will stand in the way of Turkey’s entry plans as well as work against French President Jacques Chirac’s re-election in 2007.

``The French result suggests people are skeptical about the EU and further enlargement,’’ said Armin Mekelburg, a currency strategist in Munich at HVB Group, Germany’s second-biggest bank by assets. ``That’s a pretty negative signal for the euro, and I think we’ll be heading to $1.2450 in the next few days.’’

The rejection comes against the background of weaker economic forecasts than before for the euro region. European Central Bank policy makers meet on June 2, and can once again lower the prospects for growth in the eurozone, on top of the two previous announcements as to lowering the forecast in six months.

The French administration was critical of the nation’s position, saying it will now be harder to defend France’s interests in the EU. A similar result is to be expected in the Netherlands, where sociological polls show even more euroskepsis.

``We’re entering in a period of high uncertainty, and investors don’t like uncertainty,’’ said French Finance Minister Thierry Breton on France 2. ``We’ll have to make twice as much effort. I’ll be running 100 meters carrying a 20-kilo bag.’’