The value of the U.S. Dollar has continued its downward trend against the Euro for a fifth successive trading session, and on March 3 , it dropped to a new record low of $1.526 against the Euro, as a result of escalating concerns over the state of the U.S. economy.
Based on Federal Reserve Chairman Ben Bernake’s presentation last week to the U.S. Congress on Monetary Policy, most experts have concluded that the Fed will cut interest rate, by as much as 50 basis points soon, despite the United States’ high inflation rate. While the experts see this high inflation as a big problem because of the uncertainty, they hope that slower growth will mitigate price pressures.
While the inflation rate in the Euro zone is at an annual rate of 3.2 percent in February, which was well above the target of 2.0 percent as set by the European Central Bank. (ECB), it seems certain that, the ECB is not expected to lower interest rates at its policy meeting scheduled for later this week.