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The under-fire euro fell further on Wednesday, slumping to an eight-month low against the US dollar amid rumblings over the long-term future of the eurozone. The fresh selling was prompted by a report claiming that Hans Eichel, the German finance minister, and Axel Weber, the president of the Bundesbank, were present at a meeting at which the possible break-up of European Monetary Union was discussed. The German Bundestag is also said to have commissioned a report on the legal repercussions of a country wishing to leave the EMU. Germany’s finance ministry labelled the talk “absurd”, while Mr Eichel and Mr...

FRANKFURT/BERLIN (Reuters) - The euro dipped sharply on Wednesday on reports that the possibility of a failure of European Monetary Union was discussed at a high-level meeting of German financial officials. A source who attended the meeting last week said Finance Minister Hans Eichel and Bundesbank President Axel Weber were present but that they did not take part in any discussion on the future of the system which gave birth to the euro. The Bundesbank said it would issue an official statement later on Wednesday in response to a report about the meeting in Germany's Stern magazine. Stern said the...

TOKYO (Reuters) - The dollar rallied to a seven-month high against the euro on Monday after a run of surprisingly upbeat data eased worries that the United States may not attract enough capital to fund its huge external deficit. An above-consensus rise in new jobs and retail sales in April and a narrower-than-expected trade deficit in March have fueled buying in the dollar, pushing the single European currency below its major support level this year. "Investors had preferred the euro. But now they are shifting some of their funds back to the dollar," said Takehiko Jimbo, a forex sales manager...

In 1909, President William Howard Taft and his Secretary of State, Philander Knox, came up with a rather ingenious foreign policy strategy whereby they tried to garner the support of nations through financial rather than aggressive means. It was referred to as “Dollar Diplomacy” inasmuch as they believed that money would achieve national goals rather than bullets. In the end, it actually failed, but has subsequently been employed by other administrations. Even President Bush to a certain extent used such a strategy in gaining support for the Iraq War. With the advent of floating exchange rates, and the current level...

Have you checked the value of your stocks or your real estate lately? In euros? Or British pounds? Has it all sadly disappeared seemingly while you were sleeping? Looking at the dire prognostications of currency analysts on television or in the newspapers lately would lead one to believe that all of your assets are evaporating like raindrops on a Phoenix sidewalk in August. Given the depth of the dread, I’m surprised that some of the Wall Street brokerage firms haven’t taken advantage of all this gloom by selling a currency-hedging strategy to consumers that would prevent the disappearance of home...

BARGAIN-HUNTING Britons are expected to travel to the United States this year in record numbers to cash in on the weak dollar. The exchange rate of $1.90 to £1 is the best since September 1992. Speculators believe it could reach two dollars to the pound within days — a level last seen in the 1970s. British holidaymakers to New York and Florida have always enjoyed inexpensive meals out and have regarded cheap trainers and designer clothes as an extra perk. But this year they might invest in more expensive items. A four-bedroom holiday home in the sunshine state of Florida,...

Fact and CommentSteve Forbes, 06.09.03, 12:00 AM ET Deflation: The Fast, Easy Cure The Federal Reserve, alarmed at the relentless downward pressure on business' ability to profitably price its products and services, recently declared its concern about deflation. Our central bankers are casting worried glances at Japan's debilitating deflationary experience of the past 12 years and are anxiously wondering if we're in for the same. The worries of Greenspan & Co. are welcome--but about five years overdue. Our deflation began in the late 1990s, when the Fed inadvertently tightened monetary policy. Commodity prices collapsed, and deflation then began to work...