Dollar Shrinks To Another New Low

(CBS/AP)  A mini-rally by the U.S. dollar sputtered out in European trading Tuesday morning, sending the currency to a new all time low against the euro, which hit US$1.3466.

The euro had hovered around the US$1.35 mark Monday as concerns over the U.S. trade and budget deficits and worse-than-expected U.S. employment data kept up pressure on the currency, but did not make it over the US$1.3460 record set Friday.

In late night trading in New York, the dollar came back strongly, with the euro dropping to US$1.3393, fueled by a joint statement by European Union finance ministers and the European Central bank expressing concern about the recent rapid increase in the euro.

The euro, shared by 12 European countries, has shot up from about US$1.20 since September.

The renewed slide of the dollar Tuesday started in trading in Asia, where it was trading at 102.76 yen at the end of the day, up 0.39 yen from late Monday in Tokyo but below its high of 103.39 yen in New York later the same day.

Since September, the Euro has spiked from around US$1.20 over persistent concerns about the U.S. trade and budget deficits.

It broke the US$1.34 mark for the first time on Friday when U.S. employment data came in weaker than expected.

The ripple effect of the shrinking dollar is also being seen among OPEC producers, who are to meet in Cairo Friday and are expected to bolster oil prices by approving a cut in production.

A weak dollar hurts exports to the United States - the world's largest energy consumer - and world leaders are concerned their currencies' rapid rise will have a major impact on their sales, and ultimately on their purchasing power.