The euro has again hit a new high against the dollar, giving more ammunition to those European politicians who say the weak dollar is causing problems for the region’s exporters.
It is unfortunate timing for Washington just one day before a meeting of finance ministers from the Group of Seven industrialised nations where European officials could again raise the issue.
The euro’s new record is above $1.34. Last year the US currency briefly strengthened with the euro worth just $1.18. In 2004 it hit $1.30 and back in 2002 there was parity.
Traders said the US currency’s weakness, which follows a recent run of poor economic data, stems from ongoing nervousness about the downturn in the housing market there and the continued fallout from less readily available credit.
The dollar is also down against a basket of six major currencies, including the yen, the pound and the Swiss franc, as the latest poor housing start figures increased economists’ expectations that the Federal Reserve would further lower US interest rates from their current 4.75% to cushion the country’s economy from slowing growth.