Dollar Hits New Low as Economic Woes Continue

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The U.S. dollar hit an all-time low against the Euro on Thursday. The dollar's slide followed comments by Federal Reserve Chairman Ben Bernanke that he's prepared to lower interest rates again.

RENEE MONTAGNE, host:

NPR's business news starts with the dollar descending to new lows.

You might remember the day when one dollar bought you one euro. Now you need $1.52 to buy a euro. That's a new low for the U.S. currency. It hit that mark in currency trading yesterday. The dip comes amid continued worries about the U.S. economy. It also comes on the heels of comments from Federal Reserve Chairman Ben Bernanke. Bernanke says he's prepared to lower interest rates again, which could make the dollar even weaker.

But as Eleanor Beardsley reports from Paris, some European analysts are expecting relief for the dollar.

ELEANOR BEARDSLEY: The dollar's three-day slide against the euro is the steepest since January 2004. And on Thursday the European currency jumped to an all-time high of 1.52 against the dollar, breaking the symbolic and very psychological euro-dollar barrier of 1.50.

The dollar's fall is fueled by subprime mortgage losses, the worst housing market in 25 years, and soaring credit costs. The worsening economic situation has spurred the Federal Reserve to cut rates five times since September. But the European Central Bank has not followed suit with a rate cut.

European Central Bank president Jean-Claude Trichet says his responsibility is to ensure stability while avoiding additional volatility, which could lead to inflation. The interest rate differential has caused short term investments to flow out of U.S. dollars and into euros, worsening the dollar's slide, says Hans Redeker, an analyst with investment bank Paribas. But Redeker believes an end to the dollar crisis is in sight.

Mr. HANS REDEKER (Paribas): What we are going to see in the next few weeks and months or so, weaker economic activity in Europe, and the European Central Bank has to address that as well in its assessment of monetary policy.

BEARDSLEY: Redeker says he expects a European interest rate cut by June at the latest, which could help align rates with those in the U.S. and help lower the soaring euro. That might bring some relief to Americans who are traveling and living in Europe. It would also help Europe's exporters, who send goods to the U.S. They are being killed by the powerful euro, which is making their products increasingly expensive and encouraging talk from some European companies of setting up manufacturing operations in the U.S.

For NPR News, I'm Eleanor Beardsley in Paris.

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Bush Says He Is Concerned About Slowdown

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President Bush on Thursday said he is concerned about the slowdown in the U.S. economy, but he maintained the country is not in a recession.

"I'm concerned about the economy because I'm concerned about working Americans," he said during a White House news conference. "There's no question the economy has slowed down. I don't think we're headed into a recession."

Bush said his administration acted quickly to stimulate the economy with a pro-growth package that will have refund checks going out to consumers in May. The plan sends rebates ranging from $300 to $1,200 to millions of people and gives tax incentives to businesses.

"We'll see the effects of this pro-growth package," Bush said.

The president also urged Congress to pass a law that makes it easier for the government to eavesdrop on terrorism suspects. He said the government must have the ability to quickly and effectively monitor the telephone conversations and e-mails of terror suspects.

The president said Congress should protect telecommunications companies from lawsuits when they cooperate with the government efforts. He said Congress should give companies legal immunity for helping the government eavesdrop after the Sept. 11 terrorist attacks.

"Without the cooperation of the private sector we cannot protect our country from terrorist attacks," Bush said.

The president wants Congress to renew a temporary law that expired earlier this month. The House and Senate have passed different versions of the measure, which would continue authorization of a program that lets the government listen in on the phone calls of suspected terrorists and view their e-mails.

Bush wants the House to adopt the version passed by the Senate. That bill gives retroactive immunity from lawsuits to telecommunications companies that provided information to the government after the Sept. 11 attacks.

The president also said Congress should act on fully funding the war in Iraq, where he said his troop surge has paid off with decreased deaths among U.S. soldiers and Marines and Iraqi civilians. He said the diminished violence has encouraged stability and enabled the Iraqi government to engage in reconciliation efforts.

"What they need to do is to stand by our fine men and women in uniform and stand by our troops," he said.

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