Dollar Hovers Near Record Low on Euro

[La_Serpiente]

Dollar Hovers Near Record Low on Euro

LONDON (Reuters) - The dollar hovered near a record low on the euro and multi-year lows on other major currencies on Thursday after the previous day's sell-off when Fed Chairman Alan Greenspan (news - web sites) dismissed worries about its weakness.

The market dumped the dollar on Wednesday when Greenspan indicated he was not concerned about the falling currency's impact on inflation, that the Fed could be patient about raising rates and that dollar falls should eventually help to contain the U.S. current account deficit.

Taken altogether analysts said the comments indicated U.S. interest rates would stay unchanged at 1.0 percent for the time being in contrast to countries such as Britain where interest rates have started to rise, making their currencies more attractive.

"What Greenspan has set in motion now is a sentiment of sell into dollar strength. Clearly he wasn't worried about the dollar's decline and if the Fed (chairman) sees no problem at all then it's a green light to continue selling it," said Peter Fontaine, currency strategist at KBC in Brussels.

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Dollar Hovers Near Record Low on Euro

[2004Donkeys]

1. Whatever happened to Purchasing Power Parity

Either the whole world is getting ready to go through massive deflation or we're going to go through massive inflation.