Euro Reaches New High Against Dollar

Gloomy U.S. Indicators Push Pan-European Currency To More Than $1.50 For First Time

(AP)  The euro climbed to a record high of $1.5070 in midmorning European trading on Wednesday as sentiment increased that the U.S. Federal Reserve would continue its rate cut campaign.

The 15-nation currency hit a series of highs, culminating in $1.5071 before 10 a.m. (0400 Eastern) before falling back slightly to $1.5063, nearly a full cent more than the $1.4967 it bought in late trading in New York on Tuesday, which was equal to the last record high it had reached, back in November.

In other trading, the British pound soared to $1.9941 from $1.9862 late Tuesday, while the dollar fell to 106.40 Japanese yen from 107.26 yen.

Along with the rise in the British pound, which is nearing $2 again, the surging euro will not be kind to Americans visiting Europe - they'll have to pay more for hotel rooms in Rome, entrance fees at the Louvre and chocolates in Belgium.

On the other hand, the stronger euro makes shopping trips to the U.S. more appealing to Europeans.

A higher euro also makes goods from the euro-zone more expensive for customers abroad, or cuts into manufacturers' profits if they try to keep the U.S. dollar price of products constant.

Howard Archer, the chief UK and European economist for Global Insight, said the euro's strength is not likely to weaken anytime soon, given that any "worsening in U.S. interest-rate differentials dilutes a key support for the dollar."

He also said that weaker growth prospects in the United States, coupled with its deficit will "exert a significant downward influence" in the long term and cause some countries to shift more of their reserves from dollars to other currencies, including the euro.

"In addition, there is the very real possibility that several countries could switch a proportion of their foreign currency reserves out of U.S. dollars over time," he said.

Gary Thomson, an analyst with CMC Markets in London, said the euro surged because markets are looking for clues from Fed Chairman Ben Bernanke about more rate cuts in the U.S. when he addresses lawmakers there later in the day.

"Inflation - or perhaps more to the point stagflation - remains a concern for the Fed as seen with yesterday's PPI data and as a result now that the most significant of psychological levels since parity has gone, we could see further downside pressures emerging for the greenback," he said, referring to a string of disappointing economic reports out of the U.S. on Tuesday.

Those reports included the New York-based Conference Board's Consumer Confidence Index, which fell to 75 in February from 87.3 in January, its lowest level since February 2003. Meanwhile, the U.S. Labor Department reported that wholesale inflation rose by 1 percent in January - more than analysts estimated - on rising oil and food costs. Finally, Standard & Poor's reported that U.S. home prices fell 8.9 percent in the last three months of 2007 from a year earlier, its sharpest drop ever.

Those reports, along with remarks by Federal Reserve Vice Chairman Donald Kohn that appeared to diminish inflationary concerns and focused instead on greater near-term risk to growth were seen as a clue that Bernanke is expected to signal more rate cuts.

But, at the same time, the European Central Bank, which has left its own rates unchanged since last summer, is expected to keep them at 4 percent when it meets next week.

Lower interest rates can jump-start a nation's economy, but may weigh on its currency as traders transfer funds to countries where they can earn higher returns.

[shanev137]

Where is the republican spin on how good this is for our economy? hahahaha

[skyk-2009]

There is the very real possibility that several countries could switch a proportion of their foreign currency reserves out of U.S. dollars over time.

Now all of you just keep voting for "Trickle Down"! I mean it has been so successful hasn''t it?

[rowdytexan2]

How many of us are proposing to go over to England and pay twice as much for our hamburgers and tacos?

First, we''d have to swim over there with our luggage on floaties behind us (I refuse to show up at McDonald''s London without my hair dryer!) Then we''d have to sleep on a park bench in front of Buckingham Palace with the pigeons, and trek England on foot (petrol for our rent car would be like $40/litre)and we wouldn''t get to see much of it on our five-day vacation! So I guess I''ll just stay home and not worry about the exchange rate. Whatta shame!

But I sure would like to know more about trading my $5 a week savings plan in another country so as to earn more interest! Let''s hear some more about that!

[rowdytexan2]

OMG, I left off buying a souvenir of a 1 inch miniature picture gilded in cheap brass of Liz and Phil for $70...gosh I''m gonna miss that! Reckon I could order one on-line?

[mcvet]

But I sure would like to know more about trading my $5 a week savings plan in another country so as to earn more interest! Let''''s hear some more about that!




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Posted by RowdyTexan2 at 05:51 AM : Feb 27, 2008
+ report abuse

Duh??? That''s what you got out of this story? ROFLMAO SIEG HEIL BUSH!! ROFLMAO SIEG HEIL BUSH!

[rowdytexan2]

"On the other hand, the stronger euro makes shopping trips to the U.S. more appealing to Europeans."

Hahahaha! So they can come to the US and buy more Chinese products at two fer one?

[rowdytexan2]

Posted by MCVet at 05:55 AM : Feb 27, 2008

lol, No, I''m just being a twit! I can''t sleep.

[brianbwb-2009]

You haven''t seen anything yet, wait until the next half trillion dollar budget request for the Iraq murder campaign, and the half trillion the air force is asking to pay for marked up new equipment.

And heaven help all if it is decided to continue "the surge" or if McCain somehow gets his wish to bomb Iran. then the dollar won''t be worth spit. China will be forced to cut their losses on the 1.5 trillion dollar debt Bush sold them, further devaluing the dollar, until Opec is be forced to switch to the euro to protect the value of their oil, at which time the dollar will be essentially worthless.

Stock up on dried foods, water, guns and ammo, because this will not be a pretty sight.

[kevboom]

Feels good to know the U.S. is now Europe''s "Mexico"--a cheap place to go on vacation while simultaneously helping out the poor locals resigned to the service industry. I guess America is still waiting on all of Bush''s trickle-down corporate tax cuts to kick in and spur that domestic growth. Should happen any day now. Stay the course. And what happened to the theory that war-time brought an uptick in a nation''s economy, spreading jobs and wealth? I guess that theory has been disproven too, given all the profits are going to a few favorite son, no-bid contractors. I''m sure they''ll reinvest in the people shortly as well. The new GOP--greed, oppression, poverty. Learn to vote differently, or get used to it.

[mcvet]

Feels good to know the U.S. is now Europe''''s "Mexico"--a cheap place to go on vacation while simultaneously helping out the poor locals resigned to the service industry. I guess America is still waiting on all of Bush''''s trickle-down corporate tax cuts to kick in and spur that domestic growth. Should happen any day now. Stay the course. And what happened to the theory that war-time brought an uptick in a nation''''s economy, spreading jobs and wealth? I guess that theory has been disproven too, given all the profits are going to a few favorite son, no-bid contractors. I''''m sure they''''ll reinvest in the people shortly as well. The new GOP--greed, oppression, poverty. Learn to vote differently, or get used to it.


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Posted by kevboom at 07:22 AM : Feb 27, 2008
+ report abuse

Oop''s! Now the Gestapo has put out a memo on this and we''re not supposed to discuss the actual Record of the Republican Party during this election. They have given their Propaganda People the script for fear and division and THAT is what we are to talk about. Last night in Ohio is good warning for any "Liberal" who dare''s disagree with the Party or it''s views. SIEG HEIL America. SIEG HEIL!!

[downtowner97]

The government prints the money and uses it to pay our debts. The money is worth less and less. What we need to do is print enough dollars to pay our debt in full in one week, fly it to the people we owe money to, and avoid trillions of dollars in interest. At the end of the day, our money will be worth very little against other currencies of the world, and our government will be forced to deal with the reality of what they have to spend instead of pretending everything is wonderful like Enron did in 2000.

Of course if we paid the debt in dollars, we wouldn''t be able to buy Volkswagens, oil, Vodka, diamonds and a slew of other imported items, but we can make or grow everything we need here. I switched from using gasoine to using biodiesel 3 years ago, but I still buy lot of junk from China. I''d stop buying things from China if things made in America cost less.

[jwind11]

this is a non story to the worthless libs that post here...you dont have any dollars to convert to euros anyway, so dont waste your time here making childish bashes at bush, i suggest getting a job and start relying on yourself, not the government... if not have a good day of complaining about your worthless lives

[glossypan]

Surprise! Surprise!
$275,000,000 per DAY buried in the sand in Iraq.
Money borrowed from the countries American companies purchase petroleum and consumer goods from.
Money spent recklessly.
The value of the dollar will spiral downward until Eternal War - Borrow & Spend policies are foresaken.
Four More Years ?????

[venkata4--2008]

this is a non story to the worthless libs that post here...you dont have any dollars to convert to euros anyway, so dont waste not the government... if not have a good day of complaining about your worthless lives

Posted by jwind11 at 07:53 AM : Feb 27, 2008

Hi jwind11,
We have our own jobs and we would like to stand on our own feet unlike this Prez. & VP who are depending on this government. The decline of dollar is because this Prez. brought internal debt to 9 trillion dollars from 5.5 trillions in these eight years. And budget deficits are staggering. Even at $1.5 per Euro dollar is still over priced by 40% as economists say. Just wait and watch. It is not crude oil at $102 and gold at $975. It is dollar that is becoming worth less. It is not going to hurt super rich republicans, because they might have already stacked their money in Euros in Swiss banks.

[payasyougo]

Can you remember the days when we, America, joked about how worthless was the Mexican peso.

[excoachken]

To jwind11: When the Cowardly Cowboy took office, the Euro was worth 88 cents on a dollar, and when I visited Europe I was treated with respect based upon what we did there during WW II. Now their B + Bs are filled with other Europeans. And, don''t tell me that I can''t "bash Bush" because of this. He has taken away some of my Constitutional right to privacy, my well earned "golden years" of retirement, my children''s jobs and my grandchildren''s economic independence, and you tell me that I can''t still exercise my free speech. Don''t even go there!

[clifden6]

This is more than a non-story:
America''s Spiraling External Debt and the Decline of the US Dollar

by Andre Gunder Frank

"Or what if, long before that comes to pass, exporters of oil simply cease to price it in ever-devaluing dollars, and instead make a mint by switching to the rising euro and/or a basket of East Asian currencies? That would at one stroke vastly diminish the world demand for and price of dollars by obliging anyone who wants to buy oil to purchase and increase the demand price of the euro or yen/yuan instead of the dollar. That would crash the dollar and tumble Uncle Sam in one fell swoop, as foreign - and even domestic - owners of dollars would sell off as many of them as fast as they could, and other countries'' central banks would switch their reserves out of dollars and away from Uncle Sam''s no-longer-safe haven. That would drive the dollar down even more, and of course halt any more dollar inflow to Uncle Sam from the foreigners who have been financing his consumption spree. Since selling oil for falling dollars instead of rising euros is evidently bad business, the world''s largest oil exporters in Russia and OPEC have been considering doing just that. In the meantime, they have only raised the dollar price of oil, so that in euro terms it has remained approximately stable since 2000."

[omega39-2009]

Time to put Bush''s picture on all devaluing US money. These Bush bucks will serve as a reminder to the public to never vote for anyone advocating voodoo economics again.

[peacedreamer-2009]

What a great time to be exporting our manufactured goods and establish a strong export market. Oh wait, NAFTA put an end to manufacturing in the US, so we have nothing to export. Bummer!

[mcvet]

this is a non story to the worthless libs that post here...you dont have any dollars to convert to euros anyway, so dont waste not the government... if not have a good day of complaining about your worthless lives

Posted by jwind11 at 07:53 AM : Feb 27, 2008


blab, blab, blab, blab, Lib''s, blab, blab... I wonder if these fascist have EVER had an orginal thought!! Sieg Heil Bush!!

[libsrweak]

hummmm high euro meanin..its more expensive to buy european products..weak dollar..europeans buying cheap american products...creating more jobs..more employees earning..more taxes..more dollar ..

we would feel te
he benefit of this is a few years

[libsrweak]

Can you remember the days when we, America, joked about how worthless was the Mexican peso.

Posted by payasyougo at 08:28 AM : Feb 27, 2008
+ report abuse

***********

yeah i just said that to my gardner this morning..

i think charmins toilet paper is worth more

[actiscenei]

hummmm high euro meanin..its more expensive to buy european products..weak dollar..europeans buying cheap american products...creating more jobs..more employees earning..more taxes..more dollar ..

we would feel te
he benefit of this is a few years

You don''t get it. Oil (among other commodities) is traded in dollars. In order for the oil-producing nations to maintain their prices, when the dollar falls, prices go up. Will the benefit of this be $8 a gallon gasoline this summer and lots of European tourists coming to American to buy stuff made in China?

[carpriddler]

Gold at $900 - $1000, oil is $100 a barrow, foreclosures at a all time high, car repositions at a all time high, credit card defaults at a all time high, the dollar at all time low, wages spiraling down, new jobs declining at a record rate, a new tax for everything, but the good news is the underground economy for criminals, politicians,and undocumented immigrants is doing great!!!

[drinuk]

I can recall $2.50 to the pound, so there is some way to go. Exports will be helped considerably, it''s a good move. Having said that take care, on BBC TV last night they showed a whole new car production line in RUSSIA ! Where did the plant come from ??? Detroit !!! Chrysler !!! Beware the ELITE are selling jobs not goods, a cheap dollar is going to help the asset strippers if you don''t get a grip of ''em. What you need is a Government who works for the American people and not just Wall Street or Corporate America.

Go call Ron Paul Quick.

[mcvet]

yeah i just said that to my gardner this morning..

i think charmins toilet paper is worth more


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Posted by libsrweak at 11:04 AM : Feb 27, 2008
+ report abuse

So are you saying we should NOT "Stay the Course" with our present Economic Policies? ROFLMAO Seig Heil Bush

[mcvet]

hummmm high euro meanin..its more expensive to buy european products..weak dollar..europeans buying cheap american products...creating more jobs..more employees earning..more taxes..more dollar ..

we would feel te
he benefit of this is a few years


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Posted by libsrweak at 11:03 AM : Feb 27, 2008
+ report abuse

Yeah right... just like you Nazi''s were going to cut spending and balance the budget, right? ROFLMAO Folks if you are bying the line these nazi''s are selling you deserve the results. ROFLMAO Sieg Heil Y''all ROFLMAO

[yongamerica]

The headline should read: Dollar falls to new low. The tax break to the rich, shady banking practices, loss of manufacturing jobs to overseas, unregulated payouts to the defense industry and the cost of war and rebuilding in Iraq and Afghanistan have all taken a toll on the dollars value. Its not that the cost of gas food and housing is getting higher, the value of the dollar is diminishing. The value of a dollar today is equivalent of under 30 cents in the sixties.

[random_radar]

The dollar is becoming worthless because the Fed is printing money and the government is spending money as fast as they can. That is what inflation really is.

Think about it--we are fighting an expensive war and spending increasing amounts of money on domestic programs, but your taxes are not going up. How can that be?

It''s easy when the government just prints money. Much easier than raising taxes. But it devaluates the currency because there are more dollars buying the same number of goods and services.

Inflation is the new form of taxation. Not one person in a hundred recognizes what is going on despite the ongoing destruction of the economy. You will wake up a destitute slave of totalitarianism and never understand how you got there.

[liberalme]

hummmm high euro meanin..its more expensive to buy european products..weak dollar TRITTION DOLLAR WAR..europeans buying cheap american products MADE IN CHINA...creating more jobs OVERSEAS..more employees earning.HIGHER PROFITS .more taxes ON AMERICANS..more dollar ???? ..

we would feel te he benefit of this is a few years SAY WHAT???

[liberalme]

Time to put Bush''''s picture on all devaluing US money. These Bush bucks will serve as a reminder to the public to never vote for anyone advocating voodoo economics again.


Posted by omega39 at 09:48 AM : Feb 27, 2008

I love it!!! Bush Bucks--monoply money would have a higher value!!!

[peacedreamer-2009]

I can remember when everyone thought it was good for the economy to shut down American industries and buy cheaper products from overseas. Remember the Youngstown Sheet & Tube and the way its assets were stripped off by a foriegn holding company and then the highly profitable steel mill was turned to scrap in a single day, and everyone practically applauded because it would decrease competition from the other American steel business and drive prices up overseas? I remember everyone thought it signaled a new era in the American economy. I guess it did, but not in a good way...

[isacro77]

Hmmm! be sure your sin will find you out... the sin of greed is what is destroying this great nation, every man has an inner greed and wants their benifit sufficed...example:
1. banking practices- abuse of mortgage for their benefit
2.Jobs outside of us- ceo''s personal greed...who give a lik about america
3.War- greed to try to make a name
4.Cancer- chemicals in our foods to make chicks grow faster and sell faster (greed)
5. i can go on forever but time does not allow me

answer: to our problems: REPENTANCE AND TURNING BACK TO JESUS. THE ONE THING THAT MADE THIS NATION A GREAT ONE.

[mk4711]

I''m European and spent 2 weeks in the southern US. Actually converted in our euro almost everything is too cheap. Sometimes the convertion results are just ridiculous. It was good for us, but honestly - it makes absolutely no sense and it''s really not fair. Prices for taking a bus for example. I think I paid $1 for an inner city bus ride. In Germany we pay 3 Euro or more (!) and we think that''s okay. Gas was very cheap as well. In Germany 1 litre sells for 1.35 Euro at the moment. Nothing spectacular. That''s $7.75 for 1 gallon, provided that 1 gallon equals 3.785411784 litres and 1 Euro equals $1.50. Please correct me, if I''m wrong. I''m quite shocked now. And that is still cheaper than in the Netherlands next door. On the other hand Wal Mart failed in Germany because they couldn''t compete with local retailers. Too much competition. Crazy. Anyway, in the US I had the impression that lots of people lack purchasing power. I don''t know why. The tax burden is said to be much lower in the US. Gas, eletricity etc. is so expensive in the EU because it is so heavily taxed. Well, all this seems so out of proportion that I''m sure it''ll bounce back to normal rather soon.

[rudy654-2009]

this is a non story to the worthless libs that post here...you dont have any dollars to convert to euros anyway, so dont waste your time here making childish bashes at bush, i suggest getting a job and start relying on yourself, not the government... if not have a good day of complaining about your worthless lives
Posted by jwind11 at 07:53 AM

Oh look it''s mr. corporate welfare. HELLO!!! How are you today? Getting another fat welfare check under the guise of helping you? Will you be on the internet all day while the rest of work to pay for your corporate welfare? The only people who don''t contribute anything to the economy is people like you. Don''t project your trailer trash mentality on the rest of us. Now, back to Wal-Mart with you.

[rudy654-2009]

Wal Mart failed in Germany because they couldn''''t compete with local retailers. Too much competition. Posted by mk4711 at 02:58 PM

We don''t believe in competition in the US, we believe in corporate monopolies and corporate welfare, but not competition. Good for Germany!

[omega39-2009]

On the other hand Wal Mart failed in Germany because they couldn''''t compete with local retailers.
Posted by mk4711 at

Walmart has a well documented history of selling items below cost to destroy the competition (especially mom & pop stores), you must have some regulatory agency that isn''t run by a lobbyist whose only credentials are that he opposed the very regulatory agency he is now head of.

[davidlar2]

We can only blame ourselves. We want the federal reserve bank to cut interest rates to make mortgages cheap. We want the government to expand services and want to tax other people or no one at all to pay for them (or future generations). If we keep voting for clowns like the people we have in Congress who generate huge deficits on pork and who then appoint other clowns like Bernanke to run the Federal Reserve Bank, this is what we get.

As a country we need to realize that there is no free lunch- we need to afford and pay for what we have, not use unrealistic amounts of borrowed money and not expect tax redistributions from the rich in an even more progressive tax structure.

[dredre2k]

SH*%, and i''m headed to France on Friday.
The dollar is WORTHLESS! Maybe we should start using Euro''s here...
This is a longshot, but methinks that the Fed is intentionally allowing the dollar to devalue so that the Amero can take its place. Haven''t heard of it? Google it... it''s a proposed currency for US, Canada and Mexico. Will function similar to the Euro.

[mk4711]

About wal mart''s failure - quote: After almost nine years in Germany, Wal-Mart seemingly could not win over German customers, who are very price-focused. Although Wal-Mart offers "everyday low prices", it found that its German competitors offered just as low of a price on many items, putting it on a level playing field with the Wal-Mart stores in the area. In addition, some of Wal-Mart''s signature offerings like smiling employees, baggers at checkout and stores outside of town centers proved unfavorable to the standard German consumer. http://www.bloggingstocks.com/2006/07/28/wal-mart-to-sell-85-stores-in-germany-and-exit-country/

[mk4711]

About wal mart''s failure - quote: After almost nine years in Germany, Wal-Mart seemingly could not win over German customers, who are very price-focused. Although Wal-Mart offers "everyday low prices", it found that its German competitors offered just as low of a price on many items, putting it on a level playing field with the Wal-Mart stores in the area. In addition, some of Wal-Mart''s signature offerings like smiling employees, baggers at checkout and stores outside of town centers proved unfavorable to the standard German consumer. http://www.bloggingstocks.com/2006/07/28/wal-mart-to-sell-85-stores-in-germany-and-exit-country/

[peacedreamer-2009]

I think the US has to stop relying on the profitability of large corporations and start encouraging millions of small businesses. You go to countries were the economy is strong, and it''s built on mom and pop, not on greedy corps. Mom and pop pay their taxes, greedy corps avoid taxes. Mom and pop shop locally, greedy corps send the money to some distant HQ where the money is dispersed to who knows where. If the US were smart, it would open a floodgate of micro loans and encourage small business.

[mk4711]

It''s off-topic, but one more word on wal mart''s failure in Germany - quote:
Wal-Mart''s biggest strength is competing on price, but because local German stores Aldi and Lidl were able to deliver good quality grocery at very affordable prices, Wal-Mart could never compete. Aldi and Lidl promoted weekly sales and heavily discounted merchandise, which drew the customers back to it. Wal-Mart opened all the stores in the suburbs and customers were very reluctant to drive that far for grocery. With the local shops providing better rates, customers had no need to drive to the suburbs. People were not even comfortable with the idea of the hypermarket. http://www.thehindubusinessline.com/catalyst/2006/12/14/stories/2006121400070200.htm

[mk4711]

It''s off-topic, but one more word on wal mart''s failure in Germany - quote:
Wal-Mart''s biggest strength is competing on price, but because local German stores Aldi and Lidl were able to deliver good quality grocery at very affordable prices, Wal-Mart could never compete. Aldi and Lidl promoted weekly sales and heavily discounted merchandise, which drew the customers back to it. Wal-Mart opened all the stores in the suburbs and customers were very reluctant to drive that far for grocery. With the local shops providing better rates, customers had no need to drive to the suburbs. People were not even comfortable with the idea of the hypermarket. http://www.thehindubusinessline.com/catalyst/2006/12/14/stories/2006121400070200.htm

[sjc_1]

If you look at the 10 year treasury bond, it is around 3.5% or so. This tells me that people are still buying them at that rate. If there is open market action to buy bonds by the Fed then the U.S. dollar could lose even more value.

[sociallyjust]

Section 486 of Title 18, USC (one of the Legal Tender Laws) - Does Not Apply to Non-Coin Forms of Currency

The Liberty Dollar got sacked because it was plainly in violation of 18 USC Section 486, which reads as follows:

"Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title (!1) or imprisoned not more than five years, or both.

(That, of course, also kills the idea of creating a purely bullion-weight denominated physical gold currency for the time being, but using digital gold currencies and American Eagles is just as workable.)

Obviously, American Eagle bullion coins, declared by law to be legal tender, are excepted from the application of this statute. Only coins of "original design" or those resembling coins of foreign countries, if passed as current money, are covered.

That leaves paper bills (which we are not addressing here) and digital gold currencies - so we''re clear of any legal challenges to the use of digital gold or American Eagles coins in day-to-day commerce within the United States.