From the department of how-low-can-you-go:
The dollar fell to a record low against the euro on speculation the worsening growth outlook in the U.S. will push the Federal Reserve to cut borrowing costs at the end of the month.Many Americans, especially those who hold to the idea of American exceptionalism, believe that economic rules don't apply to them the same way as other nations. These folk will be shocked when inflation, and high interest rates, start to choke an already injured US economy.
An index measuring the dollar against six major currencies sank to an all-time low after Bank of America Corp. said profit missed analysts' estimates, stoking concern a housing slump is hurting corporate earnings and growth. The yen rallied as investors trimmed riskier investments funded by loans in Japan. European equities and U.S. stock futures declined.
``The Fed needs to cut rates sooner rather than later,'' said Steven Butler, director of trading at Scotia Capital Inc. in Toronto. ``The risk of a U.S. recession is ever increasing, and the dollar can still fall a lot further.''
The dollar declined 0.6 percent to $1.4294 per euro, after earlier reaching an all-time low of $1.4305. The previous record was $1.4283 set on Oct. 1. The U.S. currency fell 1 percent to 115.46 yen at 8:47 a.m. in New York. It earlier reached 115.29, the lowest since Oct. 2. The dollar has dropped 7.7 percent against the euro and 3 percent versus the yen so far this year.
The New York Board of Trade's dollar index touched 77.5, the weakest since the index began in 1973.