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US Dollar Drops Against the Euro


The value of the U.S. dollar has fallen to a 19-month low compared to the euro.

In some trades Friday, it took more than $1.30 to buy one euro.

Each dollar bought less of other major currencies as well.

Analysts say the dollar is weakening because U.S. economic growth is slowing. That slowdown makes the U.S. central bank less likely to raise interest rates. At the same time, the European Central Bank has been hinting that a rate boost may be in the works, as it tries to fend off inflation.

Higher interest rates make currencies more attractive to investors, so they are selling dollars and buying euros. Strong demand for euros raises the price of that currency, while reduced demand for dollars cuts the price of the greenback.

A cheaper currency makes U.S.-made goods less expensive for foreign buyers, boosting exports. That could speed up the economy, and eventually, strengthen the dollar.

Some information for this report was provided by AFP, AP and Reuters.

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