The dollar slumped yesterday and the euro climbed to a three-week high against the currency. A steady slide in the value of the dollar since late 2005, primarily against the euro and the British pound, has steepened over the last month amid indications that interest rates will rise in Europe, while the Federal Reserve is expected to cut rates this year. At the same time, countries with large dollar holdings are showing a new willingness to dump the dollar in favor of the rising euro, though the current activity is seen as posing little long-term risk to the dollar. (New York Times, Wednesday)
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