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The U.S. Dollar: Still Going Down

The dollar's weakness does a lot more than alter your vacation plansand there's good news and bad news in the currency's decline

You aren't planning a flight to Düsseldorf anytime soon. Yokohama isn't on your calendar, either. So should you care that the dollar has plunged in value against the euro, the yen, and other currencies? For sure. Because even a nation as big and relatively insulated as the U.S. is profoundly affected by changes in the value of its currency, in ways both good and bad.

The dollar's slide continued on Feb. 28, when it hit nearly $1.52 per euro, the most money it has taken to buy a euro since the common currency was launched a decade ago. The U.S. Dollar Index, which tracks the dollar vs. a market basket of six major currencies, fell to 73.7, which is a decline of about 4% so far this year and 39% since early 2002. Currency traders were unimpressed by the support for the dollar voiced Feb. 28 by President George W. Bush, who said: "We believe in a strong dollar policy, and we believe, I believe, our economy's got the fundamentals in place to grow and continue growing."