Other Currencies May Follow The U.S. Dollar

I came across a news article on abcnews.com about the shrinking currencies around the world. Matt Moore wrote the article which was published on line. It sounds as if the different world currencies may share the same fate as our U.S. dollar. Of course the American dollar is not doing well. In fact our American dollar should have it's name change to the 'Shrinking Green'.

Moore spoke of the euro European trade closed with a drop at 1.5262. It was even stated in Matt's report by the European Trade Union Confederation that the "excessively expensive euro will cost European jobs..." This morning before the drop it did show a short lived promise at 1.5370. But like the American dollar, it too is showing signs of weakening. The pound dropped to 2.0027 after trading just slightly higher at 2.0057 and the Japanese yen dropped from 103.87 to 103.11.

Matt Moore wrote, "European Union businesses said they were starting to feel the pinch, too, notably from U.S.-based buyers who pay for goods from Europe."

"We said when the euro was above $1.40 that we feel the pain. When the euro is above $1.50, it is alarming," Mr Moore quoted Ernest-Antoine Sillier, president of the EU employers' group BusinessEurope in this report.

"On Wednesday, reports showed that U.S. factories saw demand for their products drop sharply in January, while the country's service sector contracted last month. That provided new evidence of weakness in an economy hit by housing and credit crises — weakness that has raised expectations that the Fed is not done with its interest rate campaign." Matt in his news report continues his observation. "Speculation has mounted that the Fed might cut rates by as much as three-fourths of a percentage point this month. Lower interest rates can jump-start a nation's economy. But they can also weaken its currency as traders transfer funds to countries where they can earn higher returns."