RENEE MONTAGNE, host:
The value of the U.S. dollar fell so low yesterday that it hit parity with the Canadian dollar for the first time in more than 30 years. And the greenback declined to a new low against the euro, the currency used in more than a dozen European countries.
From Berlin, NPR's Emily Harris reports.
EMILY HARRIS: The euro has only been physically around for five years, but during that time, it's climb from being worth slightly less than $1 to now being worth about a dollar-forty.
Chief economist at Union Investment Bank, David Milleker, says the U.S. deficit is part of the long-term problem but not what caused this dollar drop.
Mr. DAVID MILLEKER (Chief Economist, Union Investment Bank): The trigger at the moment is really that we do have those subprime mortgage problems. The Fed has cut its interest rate. We don't have this kind of problem in Europe, and the ECB is still on a hiking bias.
HARRIS: Meaning European interest rates are higher than in the U.S., making Europe a more attractive place to invest. But it's not all good news for euro economies, says Anton Borner, head of the German exporters group BGA.
Mr. ANTON BORNER (President, BGA, Germany): This will harm our competitiveness in the world market, especially on the American market. And of course, so we are feeling the dollar growth rate will come down in the next year and business will become harder for us.
HARRIS: Tourist Sheri Jeffries(ph) from Orange County, California says she and her friends are adjusting their budget downward along with the dollar.
Ms. SHERI JEFFRIES (Tourist): We're buying lunches in markets, and then like packing our lunch instead of sitting in a restaurant.
HARRIS: This morning she was visiting the German Reichstag. It's free.
Emily Harris, NPR News, Berlin.
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