The US dollar has fallen steeply against major world currencies today amid concerns for the US economy. It plunged to its lowest level against the euro in more than one and half year as the euro sold for $1.30 a dollar. Similarly, the Pound Sterling rose by about 1 percent and stood at $1.93 while the Yen stood almost at $0.86. The most outstanding gain was that of Russian ruble. It rose to a 7-year high against the dollar to close at almost $0.038.
This follows analysts’ concerns about the US economy following the White House’s downgradation of its growth forecasts amid the sharp downward spike in the housing market. To make matters worse for the US greenback, expectations that the European Central Bank is once again going to raise interest rates made the euro bullish vis-a-vis the dollar.
The US economy slowdown also coincided with unexpected rise in German business sentiment that has seen quarterly growth for the sevent consecutive times along with France who is experiencing an economic revival.
With domestic markets slowing down and continuously bleeding money in the Iraq misadventure has complicated things for the Bush administration considerably. What remains to be seen is how the administration is going to win the confidence back in the domestic front when it is looking so grim economically.
