BERLIN, Feb. 27, 2008
Euro Reaches New High Against Dollar
Gloomy U.S. Indicators Push Pan-European Currency To More Than $1.50 For First Time
-
A Euro sculpture is seen in the autumnal sun in front of the European Central Bank ECB building, background, in Frankfurt, Germany, on Sept. 24, 2007. (AP Photo/Bernd Kammerer, file)
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.
Quote
"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.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.
Howard Archer, Global InsightGary 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.
© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
Michelle Obama tells how her role as the First Lady has changed her perspective.
- 1
- 2
- 3
- next
See all 46 CommentsThe 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.
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
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
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.
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.
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.
We don''t believe in competition in the US, we believe in corporate monopolies and corporate welfare, but not competition. Good for Germany!
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.
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.
Posted by omega39 at 09:48 AM : Feb 27, 2008
I love it!!! Bush Bucks--monoply money would have a higher value!!!
we would feel te he benefit of this is a few years SAY WHAT???
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.
we would feel te
he benefit of this is a few years
--------------------------------------------------------------------------------
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
- 1
- 2
- 3
- next
See all 46 Comments