Federal Reserve chairman Ben Bernanke made a rare intervention into the currency markets Monday to speak about the dollars sliding value. Bernanke said that the Reserve is striving for a strong dollar to ensure financial stability.
The price of gold hit an all-time high of close to 1,040 dollars an ounce on Tuesday as the dollar fell on rumours that Gulf states were considering ditching the greenback in favour of a basket of other currencies for oil trading.
Argentina is to propose to the Latin American Integration Association the idea of ditching the dollar in Latin American trade. It would be an extension of an existing treaty between Argentina and Brazil.
The People's Bank of China Governor Zhou Xiaochuan announced he wants the vulnerable dollar replaced as the international reserve currency. He suggested the IMF's Special Drawing Rights as a solid super-sovereign currency.
The euro rose by almost five cents against the dollar in New York late Tuesday after a US Federal Reserve announcement of a rate cut to 0.25%. Sterling slumped to another record low and got closer to parity with the euro.
In late London trading, the Euro sank to 1.3092 dollars, a low not seen since March 9, 2007. This comes on the heels of a US Federal Reserve announcement from Ben Bernanke that it would back another US stimulus package
The euro hit its lowest point against the US currency since September 18, 2007, falling to 1.3856 dollars in early trading on Thursday after US Senate approved the $700 billion bailout plan.
Oil prices tumbled to six-month lows below 97 dollars on Thursday, as the dollar rallied and the likelihood of a sharp global economic slowdown loomed over demand growth, traders said.
The euro fell to 1.4165 dollars on Monday marking an 11-month low. The dollar's rise follows the US government's decision to rescue mortgage giants Fannie Mae and Freddie Mac.
