U.S. Dollar again Declines Against Euro and Pound Sterling

The decline in the value of the U.S. dollar continued on Thursday, March 6, after the European Central Bank decided to keep its benchmark interest rate unchanged at 4.0 percent.  Furthermore, the release of grim U.S. economic reports confirmed that, while demand for products from U.S. factories fell sharply in January, the U.S. service sector shrank.  

The Euro increased to an all-time high against the dollar, after the European Central Bank president Jean-Claude Trichet announced that inflation risks in the Euro zone remained on the “upside.”  According to data released by Reuters, the currency rose to an all-time high against the U.S. dollar at $1.5370, before retreating to $1.5339, an increase of half a percent on the day.

The latest increase in the value of the Euro against the dollar is not good news to the trade unions in Europe, as exports to the United States continue to suffer.  According to analysts, an expensive Euro will cost more jobs in Europe at a time that there are other factors at play which are negatively impacting economic growth.

The British Pound Sterling also rose against the U.S. dollar after the Bank of England announced that its key refinancing interest rate would remain unchanged at 5.25 percent.  Yesterday, the currency traded as high as $2.0057 in the morning, before closing at $2.0027.

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