Dollar Further Down Against Euro
September 26, 2007
The value of the dollar has fallen yet again to a new all-time record low against the euro, after ongoing unrest within the US economy has led to more widespread sell offs on international currency exchanges.
With US consumer confidence down to its lowest point in over two years, and average US house price plummeting off the back of a continuing demand shortage in spite of the Federal Reserve interest rate cuts, investors are turning away from the dollar, seeing its value fall even further against the euro.
Analysts have also added that the Federal Reserve could be poised to cut interest rates even further in an attempt to get the US economy back on track - news which has served to further dissuade investors in the dollar.
Simultaneously, the euro has been increasingly gaining in strength over the last few sessions with the promise of a central bank interest rate rise throughout the eurozone and strong growth forecasts from France sufficient to attract investors to the single currency.
In early Wednesday trading, the value of the euro was up to $1.4163 - an all time high - before slipping back to just over $1.41 by mid-morning throughout European markets.
The ongoing strength of the euro is causing problems for those exporting outwith the eurozone, as they are forced to slash prices in order to remain competitive.
Meanwhile US exports are enjoying something of a revival, particularly within the eurozone as a result of the weakened currency, which has seen US manufacturing industries performing well in recent weeks.
Analysts and currency traders are now further awaiting results from the US in order to make their next investment decisions. Depending on the outcome of the report on durable good sales due at the end of this month, trading in the dollar could plummet further towards the danger $1.45 mark.