Saturday, April 28, 2007

Dollar Falls to Record Low against Euro

Back in December, 2006, I wrote about the Dollar in this post: "Will the Dollar continue to fall?"

Today the dollar reached another record low against the Euro,

Yesterday, on the foreign exchanges the euro traded at close to $1.37, while sterling pushed back above the $2 barrier after being under pressure on Thursday.

The reasons for the fall in the dollar include:

  1. Large Current Account deficit - and evidence the Chinese are starting to diversify away from investing in the US.
  2. Falling Growth rates - partly due to slump in housing market see: Is Us Economy heading towards Recession?
  3. Rising Inflation, despite falling growth rates, US inflation is remaining persistently high - close to 4%
  4. Fall in Confidence in US economy
See also:

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