The U.S. dollar fell to another record low against the common European currency Monday and oil prices dropped sharply.
Crude oil prices plunged nearly three dollars a barrel in New York to under $42 a barrel. The over six percent decline took the oil price back to its lowest level in nearly a month. Since peaking at $55 a barrel in late October, oil has come down by about 25 percent. But for the year as a whole oil is still about a third more expensive than it was at the end of 2003. Analysts say Monday's drop was caused by predictions that the North American winter may not be as cold as previously predicted.
The dollar continues its relentless decline that is now nearly three years in duration. The U.S. currency touched another record low against the euro, $1.36 in New York trading. The dollar also fell against the Japanese currency Monday, trading at 103 yen to the dollar. Traders say the dollar could decline to 100 yen within the next few weeks.
The Bush administration continues to say it favors a strong dollar but that market forces should determine its value. Currency traders increasingly believe the Bush administration is pursuing a weak dollar policy in the hope that a weaker currency will bring the massive U.S. trade deficit under control.
Gold, already at a 15 year high, is having its longest rally in many years. Gold traded Monday four dollars higher in New York at $446 an ounce. Gold has risen for four consecutive years.