Nov. 25, 2004
By Steven Downes
Times Online
The decline of the dollar moved to a new phase today - the Thanksgiving holiday in the United States - which saw gold, the traditional safe haven commodity in times of economic turmoil, reach its highest price since 1986.
Gold soared above $452 a troy ounce by the close in London tonight, as the dollar has slumped to a new low against the euro.
With two CBI reports today expressing concern about the stalling of the economic revival in the UK due to rising oil prices hitting manufacturing, the continuing dollar weakness will only worsen the plight of exporters in Britain and the rest of Europe.
The euro jumped to a high of $1.3237 on further suggestions that not only would the US Treasury continue its non-policy policy of "benign neglect" by not intervening on the forex markets, but it would actively tolerate a weaker dollar, in order to assist US businesses, effectively at the expense of Europe and Asia's economies.
The dollar also fell to a new four-year low against the yen of 102.61 yen.
The United States's massive trade and budget deficits have been behind the dollar's slide in recent months. Rising oil prices - back above $49 a barrel - have further worried markets in Europe.
http://business.timesonline.co.uk/article/0,,13129-1374979,00.html