Dollar breaches 1.25 to Euro

Brussels: The US dollar hit a record fresh low against the Euro and crossed the psychological barrier of 1.25 to one Euro mark yesterday.

The European Union is obviously seen taking the brunt of the fall of the dollar. Hence, the exchange rate issues would have a special priority on the G-7 agenda, when it meets in Florida, US, in February 2004.

The dollar has fallen by some forty per cent against the Euro. The Euro has topped the forecasts for the 2003 year-end.

There is much speculation in the currency markets about the future status and value of the dollar against the Euro - the more pessimistic forecast being that the greenback will hit the 1.35 Euro mark in 2004 while the more optimistic perception is that the dollar could be in 1.15 - 1.20 mark against the Euro.

The dollar was at 1.17 level when the Euro was launched two years ago in January 2001, but few would have thought that the single Eurozone currency would gain this much this fast.

Crossing the 1.25 barrier means that the Euro has risen 16 per cent in 2003 and gained some four per cent in December.