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post #1 of 44 (permalink) Old Apr 22nd, 2008, 04:46 PM Thread Starter
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Dollar slumps to new record low versus euro

Dollar slumps to new record low versus euro

By MATT MOORE, AP Business Writer
1 hour, 7 minutes ago


The euro roared to another record high Tuesday, briefly crossing $1.60 in late afternoon trading in Europe after a pair of European Central Bank governors said high inflation may cause the bank to raise interest rates.
The euro rose as high as $1.6002 before falling back to $1.5968, above the $1.5916 it bought in New York late Monday. The euro has risen 20 cents against the dollar in just five months and 10 cents in just two months.


The 15-nation currency hit its last record of $1.5982 last Thursday. It dropped back on Friday after a Wall Street rally generated optimism that the worst of the U.S. credit crunch may be over, but rose again on Monday when Bank of America's first-quarter earnings fell short of expectations.


The dollar's slump is a boon for U.S. companies that rely heavily on exports, but it's the bane of travelers as worldwide inflation rises, air fares climb and the price of everything from beer in Munich to fine wine in Paris to gondola rides in Venice are even pricier.


Tuesday's remarks by Yves Mersch in the Financial Times Deutschland and comments made by Christian Noyer to France's RTL radio showed the governing council of the ECB is committed get euro zone inflation back around 2 percent, below the current 3.6 percent it is at now.


It effectively threw water on any hopes of a rate cut by the bank, which has kept its benchmark rate unchanged at 4 percent since June even as the Federal Reserve, Bank of England and Bank of Canada have consistently lowered their own rates.


On Tuesday, the Bank of Canada slashed its interest rate by half a percentage point to 3 percent. It also hinted another cut may be coming as it feels the effects of a slumping economy at its largest trading partner.
The dollar has been weighed down by a combination of gloomy U.S. economic data and high European inflation — fueling expectations that the Fed will cut interest rates yet again, while the European Central Bank will leave rates unchanged.


Lower interest rates can weigh on a nation's currency as traders transfer funds to countries where they can earn better returns, while higher rates are used to curb inflation.


The British pound has been hit by a cautious reception for Monday's announcement by the Bank of England of a 50 billion-pound ($100 billion) plan to allow banks to swap mortgage-backed securities for Treasury bills.
It reversed its declines though on Tuesday, rising to $1.9951 from $1.9798. The dollar was down against the Japanese currency, dropping to 103.09 yen from 104.17 yen.


The high euro is bound to cause more pain for European manufacturers who look to the United States because it means prices for their goods are more expensive.


Airbus, a unit of European Aeronautic Defense and Space Company announced a general price increase for its aircraft of an additional $2 million per single-aisle aircraft and $4 million per wide-body long range and A380 family aircraft as of 1 May, citing the high euro and the cost for raw materials.


In Germany, automaker BMW AG has said it will start producing more cars in South Carolina in a bid to take advantage of the cheaper dollar and Volkswagen AG has said it is likely to build a new production plant in the United States, too.
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post #2 of 44 (permalink) Old Apr 22nd, 2008, 04:52 PM
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Re: Dollar slumps to new record low versus euro

Hoppefully the dollar will recover ones the Federal Retarded stops lowering interest rates. They obviously don't realize that ridiculous low rates are what caused all our problems to begin with.

But lower rates, and weaker dollar, a weak economy... it's all leading to us being able to afford much less. But at the same time everything is getting much more expensive. Gas prices are KILLING me.

But still, oil companies are making record profits and speculators are jacking prices up even further. We seriously need to boycott gas as much as we can, send them a message that we're not going to purchase it unless they reduce rates to a more reasonable level. There's no REAL reason for gas to be over even $2/gallon.

Hopefully the economy recovers soon and interest rates can go back up. Then, I think the dollar will recover to a reasonalbe exchange rate. In the meantime, it's not really hurting us that bad, unless you're taking a trip to Europe. It will go back up eventually. Unless our country falls apart.

But consumers seriously need to grow some balls and do the smart thing, refuse to buy any gas that you don't absolutely need and cut way back on driving. Making the oil companies lose money is the only way to change prices for the better.


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post #3 of 44 (permalink) Old Apr 22nd, 2008, 04:55 PM
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Re: Dollar slumps to new record low versus euro

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Originally Posted by Rocketta View Post
The euro roared to another record high Tuesday, briefly crossing $1.60 in late afternoon trading in Europe after a pair of European Central Bank governors said high inflation may cause the bank to raise interest rates.
This is why inflation is so bad here and the dollar is so weak... because we lowered rates to fight a recession (which is stupid to do with inflation so high and will lead to even more financial issues in mortgages and such). Eventually the European banks will need to lower rates, too. I don't know why in the world they think they should raise them, unless they want a stronger Euro. But that only hurts exports, so I don't know.

It makes me sad that the dollar is so weak, but I'm really, really hoping it will get better after this recession crap is done.


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post #4 of 44 (permalink) Old Apr 22nd, 2008, 04:56 PM
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Re: Dollar slumps to new record low versus euro

there is no end for bad news.
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post #5 of 44 (permalink) Old Apr 22nd, 2008, 05:09 PM
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Re: Dollar slumps to new record low versus euro

Oil nears $120 a barrel:

http://money.cnn.com/2008/04/22/mark...ion=2008042212


It was below $100/barrel a few weeks ago.

We're in such horrible shape, in EVERY area of the economy. High gas and goods prices, high inflation, low interest rates, weak dollar, poor stock market. It's just horrible.


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post #6 of 44 (permalink) Old Apr 22nd, 2008, 05:12 PM
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Re: Dollar slumps to new record low versus euro

This is getting out of hand! I got a new job with a nice raise and it is all going to gas! Why are the oil companies making record profits when we are paying record prices for gas? I am sorry but it is time to tap into some oil reserves. When I was 16, gas was $ .90 a gallon! I could fill up my entire car for $12 and now $12 doesn't put but maybe a quarter tank in my car.

With gas almost at $120, that means it has had a 20% raise in recent weeks. OMG!
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post #7 of 44 (permalink) Old Apr 22nd, 2008, 05:20 PM
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Re: Dollar slumps to new record low versus euro

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When I was 16, gas was $ .90 a gallon!
Same here, those were the days.

But OPEC has discovered that Americans love to drive, and that they'll pay a lot to do it. So they cut production to lower supply and increase demand/prices.

We're making those Sultans very rich.


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post #8 of 44 (permalink) Old Apr 22nd, 2008, 06:13 PM
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Re: Dollar slumps to new record low versus euro

I'm gonna be SOOOOOOOOOOOOOOO broke when I come back from Wimbledon. LOL
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post #9 of 44 (permalink) Old Apr 22nd, 2008, 06:22 PM
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Re: Dollar slumps to new record low versus euro

If anyone is interested, not only Euro but also Czech koruna has reached a new high compared to the US dollar. This time last year one dollar was worth more than 20 korunas, now it is about 15. That's more than 25% in one year.

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post #10 of 44 (permalink) Old Apr 22nd, 2008, 06:28 PM Thread Starter
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Re: Dollar slumps to new record low versus euro

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I'm gonna be SOOOOOOOOOOOOOOO broke when I come back from Wimbledon. LOL

yes you will but not because of the Euro, the pound is even worse.
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post #11 of 44 (permalink) Old Apr 22nd, 2008, 06:38 PM
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Re: Dollar slumps to new record low versus euro

maybe we americans need to change our driving habits. 4 dollars a gallon isnt a lot when compared to other countries in Europe and Japan. if you buy a huge suv, expect to pay for it.

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post #12 of 44 (permalink) Old Apr 22nd, 2008, 06:42 PM Thread Starter
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Re: Dollar slumps to new record low versus euro

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Originally Posted by sakya23 View Post
maybe we americans need to change our driving habits. 4 dollars a gallon isnt a lot when compared to other countries in Europe and Japan. if you buy a huge suv, expect to pay for it.
I don't have a huge suv and it costs me close to $40 a tank. I agree that cars should have better gas mileage but I don't think comparing driving in the US to countries that are not bigger than most states in the US.
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post #13 of 44 (permalink) Old Apr 22nd, 2008, 06:43 PM
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Re: Dollar slumps to new record low versus euro

I love my suv but my dad hates giving me money for gas.I really hope the dollar can bounce back, its getting harder every year for me to go to europe.
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post #14 of 44 (permalink) Old Apr 22nd, 2008, 06:45 PM
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Re: Dollar slumps to new record low versus euro

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I don't have a huge suv and it costs me close to $40 a tank. I agree that cars should have better gas mileage but I don't think comparing driving in the US to countries that are not bigger than most states in the US.
Yeah and plus they walk and bus way more then american do. I'm sure most people wouldnt mind walking or riding the bus but things are so far apart in most cities in america (the ones I've been to) that its way easier to drive.
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post #15 of 44 (permalink) Old Apr 22nd, 2008, 06:45 PM
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Re: Dollar slumps to new record low versus euro

Time to make a shopping trip to NY for the europeans!!

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