Jean-Claude Juncker, the EU’s ‘Mr Euro’, has given the clearest warning to date that the world authorities may take action to halt the collapse of the dollar and undercut commodity speculation by hedge funds.
Momentum traders have blithely ignored last week’s accord by the G7 powers, which described "sharp fluctuations in major currencies" as a threat to economic and financial stability.
The euro has surged to fresh records this week, touching .5982 against the dollar and £0.8098 against sterling yesterday.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/04/18/cneuro118.xml
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A lot of the value of the US dollar comes from the fact that it’s the international currency.
WHEN that stops ( and it will happen), the US dollar will drop, probably by a fair bit.
That will make imports more expensive and exports cheaper for other countries to buy, which will help the US employment.
BUT – the US has a huge amount of debt that’s held by foreign companies and governments. That’s going to get a lot bigger and it will take more time to pay it off unless it’s in US$.
They won’t
Don’t believe everything they print. Posturing is always done.
Europe will not chance that change. The need for help during wars give a dependency to the US. WWI & WWII is still fresh in peoples minds.
Does it really matter anyway? Everyone is afraid of Iran and Iraq and South Korea..I think it is rather funny because people don’t realize China really owns us. They hold so much of our debt if they wanted to collect in full we would belong to China. So maybe instead of everyone wanting to learn Spanish or French we should be learning Chinese.