Oil at $84 a barrel. The dollar at $1.40 to a Euro. Russia has $420B in currency reserves and Americans have a 0% saving rate and are buying heavy Chinese at WalMart. The world saves and we spend. We shall see.
US dollar plunges to new lows
By James Quinn in New York and Emma Thelwell in London Telegraph
Last Updated: 3:22am BST 21/09/2007
The US dollar plunged to fresh lows against global currencies as investors flee the greenback amid signs that this week's 0.5pc rate cut by the Federal Reserve will not be its last.
The dollar fell to its lowest level against the euro since the currency's inception, breaking through the $1.40 barrier, as Fed chairman Ben Bernanke raised expectations that a further cut is on the cards.
Against the euro, the greenback almost hit $1.41 at one stage, while the Canadian dollar hit parity with its American counterpart for the first time in 31 years.
Sterling was up 0.45pc at $2.0093. Analysts expect the dollar to weaken further against the euro. Barclays Capital's Paul Robinson warned it could slide to $1.42 by the end of the year, possibly even hitting $1.45.
The Daily Telegraph's report that Saudi Arabia is preparing to break its dollar-peg intensified the woes, as did the rising price of oil, which surged through the $83-a-barrel mark as oil companies closed down facilities in the Gulf of Mexico.
In New York, US crude was up $1.44 at $83.37 by mid-afternoon, while in London, Brent crude rose 40c to $78.87.
Investors headed to the gold markets, with the yellow metal jumping its highest in 27 years, touching $746.50 at one stage in New York.