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(From New Straits Times (Malaysia))
THE US dollar, after the news of Saddam Hussein's capture, took a respite from its slide. But only for a day before it continued to fall.
The dollar slide has became even more severe - hitting a record low against the euro (more than US$1.24 to the euro), a seven-year low against the Swiss franc (more than 1.25 Swiss francs to the dollar ), a six-year low against the Australian dollar (74 US cents to the Aussie dollar), and making the yen even more expensive (at around 107 yen to the dollar).
Many are asking: What has happened to the dollar? Aren't US President George W. Bush or and Federal Reserve chairman Alan Greenspan concerned? Is there a political agenda behind the fall of the dollar? In the last year, dollar has fallen 15-20 per cent against the euro and 10-15 per cent on the yen. Forex dealers believe the dollar decline is far from over.
Earlier this year, some European companies had budgeted for the euro to end 2003 at US$1.20. But today they are revising their expectations to US$1.25.
Even that may be surpassed before the year is out. Last week, the euro broke the psychological level of US$1.24.
Last week, European Central Bank chief economist Otmar Issing said the euro's exchange rate against the dollar "is back to normal", having reached the same level as the time it was introduced in 1999 - US$1.17.
Investment house Merrill Lynch said in its latest fundmanager survey that the euro would hit US$1.33 next year. Added to that, ECB sources said, the bank would not intervene unless the euro rose above US$1.35.
It was only on Jan 1, 1999, that the …