Dollar hits yet another low against euro
November 23, 2004
BERLIN (AP) – The dollar slumped to a new record low against the euro Tuesday, after a weekend meeting of the world’s top finance officials failed to send any signal that governments were preparing to slow its slide.
The European currency rose to $1.3093 in early afternoon trading, breaking the previous record of $1.3074, set Thursday.
The euro has risen roughly 10 cents in two months, prompting European leaders to worry openly that the continued rise of the euro might damage their fragile export-driven recovery. While a weak dollar helps U.S. exporters, it can make items like German sports cars or French wines more expensive, or lower profit margins for their manufacturers.
Introduced in 1999 as the common currency for 12 European countries, the euro initially dropped against the dollar but has risen by nearly 60 percent since hitting an all-time low of 82 cents in October 2000.
Still, finance officials from the Group of 20 industrial and developing countries finished their weekend meeting in Berlin without any signal of concerted action, issuing a lukewarm statement that made no specific mention of the dollar.
Concern over the U.S. trade and budget deficits has been a major factor in the dollar’s decline, and Treasury Secretary John Snow said Sunday he told his counterparts that the United States is “dealing with its deficit.”
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Still, the meeting’s outcome shows world leaders are in no rush to intervene to slow the euro’s rally, said David Bloom, an economist with HSBC bank in London.
“The dollar’s trading very badly – it’s like pushing a basketball underwater,” Bloom said. “You push it down with your hands and say ‘look, it’s going down,’ – then it shoots up in your face.”