Dollar takes a beating

The euro is near a record high against the dollar -- one euro being worth about 1.36 -- and the British pound passed the 2 mark, a 14-year high against the dollar.
No economic news ever comes without its downside, and the British and eurozone central banks began fretting that their currencies' strength was due to rising inflation as much as economic growth.
The Europeans worry about a weak dollar because, being more export dependent, it makes their export goods more expensive. By rights a little inflation in the States would set this right, causing the Fed to raise interest rates, but the March Consumer Price Index showed inflation, with the volatile exception of petroleum, well in check.
It says something about U.S. economic growth that we can run budget and trade deficits year after year with no apparent ill effect other than on the drooping spirits of the naysayers.
When the euro was introduced in 2001 and 2002, its promoters had high hopes that it would rival the dollar as a world-reserve currency and the denomination for major world commodities like oil.
It seemed pretty funny at the time, especially when the euro, which was supposed to be about par with the dollar, promptly fell to 80 cents. The euro then began rising, and has basically traded above the dollar since.
There are now 13 nations in the eurozone and the currency is widely accepted elsewhere. While the euro is still short of being a true rival to the dollar as a world currency, the possibility now seems anything but far-fetched -- not a bad present for the European Union on its 50th birthday.
Scripps Howard News Service