Dollar breaches new low against Euro
The FT reports that the Euro closed yesterday 2 cents higher against the US Dollar at $1.1953. During today it breached $1.1970 and when I checked here just a few minutes ago it had fallen back a little to $1.1920 . The US currency is apparently beginning to experience minor difficulty in financing its short-term debt as capital inflows have slowed significantly recently.
Whilst the US quite obviously remains the engine of the world economy, I have for many years wondered how long its international borrowing could go on. I hardly think that the recent changes signal a dramatic shift, but it is perhaps another glimmer of an indication that a major shift may not be too long delayed. It is only quite recently that the Russians chose to price their oil exports in Euros, rather than the US Dollar, for example.
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