U.S. dollar still low by Corina Ciubotaru

The U.S. dollar has been weakening against the euro for six consecutive sessions and this makes it that more difficult for the economy to bounce back. The euro reached $1.4160 late Thursday in New York and $1.4189 in Europe. After the mortgage crisis, the American economy has had difficulties in every aspect, including consumers' spending power. Since the dollar is constantly hitting new lows in relation to the euro and other currencies, American tourists have less spending power abroad, which could make them choose to travel more in their own country. The housing market is still in a slump as hundreds of thousands of houses remain unsold and the number of new ones being built is also very low. The Fed's rate cut last week didn't seem to have a serious short-term impact visible in ordinary people's lives; however, it did manage to jumpstart stock markets once again and another cut is expected, probably by another half-point. The core inflation which excludes food and energy costs rose 1.8 percent during the last year but remained within the Fed's comfort zone of between 1 and 2 percent. A recession is possible, but chances are markets will eventually return to normal since the economy is still growing. The good news however is that unemployment rates are somewhat decreasing and have reached the lowest level since May during the week ending September 22nd. In relation to some of the other important currencies like the yen and the Swiss franc, the dollar rose on Wednesday in New York.

related story: http://news.yahoo.com/s/ap/20070927/ap_on_bi_ge/dollar;_ylt=ArqgOxj5p6h0NmUF6.BQDY.s0NUE

by Corina Ciubotaru for PocketNews (http://pocketnews.tv)

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