The U.S. Dollar fell to record lows against the Euro following September’s half-percentage-point cut in the Fed Funds Rate. Forecasts are for further declines in the Dollar due to the possibility of additional rate cuts by the U.S. Federal Reserve and fears of rising inflation in Europe.
As the U.S Dollar declines, inflationary concerns will increase.
Over the past few quarters, crude oil prices have continued to surge on global geo-political uncertainty and weakening of the U.S. Dollar. More recently, gasoline prices are once again tracking the rising crude oil prices.
The markets remain concerned that, as gasoline prices rise, consumers may be forced to slow spending (excluding energy) dramatically.
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