Holiday Rentals News - Dollar drops to record low after G7 meeting

Dollar drops to record low after G7 meeting

The dollar fell to a new record low against the euro today following the Group of Seven (G7) meeting of finance officials on Sunday.

After the meeting, ministers gave a communique but did not address the weakness of the US currency. This led to many traders dropping the dollar.

The euro peaked at $1.4348 early this morning breaking the Friday's record of $1.4319. Meanwhile the pound peaked against the dollar at $2.0537.

Credit squeeze has put a great deal of pressure on the dollar following the sub-prime mortgage crisis in the US, though experts remain uncertain if the Federal Reserve will cut the interest rate and are pessimistic about US growth.

Brian Dolan, chief currency strategist at Forex.com, told Bloomberg.com: "The statement gives the market a green light to sell the dollar. With no comment from the G-7 about its weakness, the dollar could decline to $1.45 per euro in a month."

Meanwhile, analysts are predicting that euro growth may mean the European Central Bank will hold the base rate at four per cent for the foreseeable future.

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