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The dollar fell to a minimum

September 21 2007
01:13

The U.S. dollar sank to its lowest level against the euro for the whole story. Euro to the dollar rose above the psychologically important level of 1.4 dollars per euro.

After the opening of trading on the currency markets on Thursday gave 1.4018 per euro dollar. Observers attributed the fall of the dollar with an unexpectedly sharp decline in bank interest rates the Federal Reserve System (FRS) the USA on Wednesday, due to which investors have in droves to get rid of dollars.

Analysts believe the Fed will continue cutting interest rates. According to the European Central Bank, further strengthening of the euro also contributed to growth in the eurozone economy and increasing interest rates in Europe.

According to analysts, the falling dollar will have a twofold effect. On the one hand, imports become cheaper in the euro area goods, which is beneficial to European consumers. Companies eurozone is happening is also beneficial, as prices for oil, metals and other raw materials often in dollars, which means cheaper costs, which are written in euros.

However, on the other hand, the strengthening of the euro leads to higher prices for goods produced in Europe, which negatively affects exports, making them less competitive in comparison with their American counterparts, reports BBC.

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