Falling Dollar, Rising Oil Prices= Bad Economic Climate

May 21st, 2008 • Related • Filed Under

The Market takes a dip today as Wall Street watched oil prices climb to $132 a barrel for the first time.

”There’s almost a parabolic rise going on,” said Richard E. Cripps, chief market strategist for Stifel Nicolaus. ”I do sense that the stock market is searching for where that oil peak is going to be … but till it finally gets there and backs off, I think the stock market is under pressure.”

Meanwhile, the U.S. Dollar is already weak compared to most major foreign currencies. Now, it sank to a record low on Wednesday. The economic climate in the U.S. appears to be worsening.

The euro rose to $1.5302 in afternoon European trading before dropping back slightly to $1.5278. The new low broke through the previous record set Monday at $1.5275.The euro had bought $1.5208 in New York late Tuesday.On Wednesday, reports showed that U.S. factories saw demand for their products drop sharply in January, while the country’s service sector contracted last month.They provided fresh evidence of weakness in an economy hit by housing and credit crises _ weakness that has raised expectations that the U.S. Federal Reserve will continue to cut interest rates.

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