Higher interest rates in eurozone weaken dollar

As interest rates remain higher in Europe than in the US, the euro is becoming a popular alternative to the weakening US dollar as a reserve currency. Since the end of November 2002, the euro has risen from an exchange rate of 99 US cents to around 108 US cents, according to Bloomberg. Steven Bell, chief global economist for DWS Investments, says the exchange rate is being driven more by weakness in the US dollar than any inherent strength in the euro. He adds people have become concerned about US structural fundamentals such as its unsustainable fiscal position, with a very large ...