The dollar dropped to a record low against the euro in early Asian trading on Thursday, breaking the $1.40 barrier for the first time since the establishment of the common currency. The Fed's half-point cut in interest rates led investors to drop the greenback, and chief Ben Bernanke's upcoming testimony before Congress might spell further trouble.
Analysts tell Bloomberg that the Bernanke-led reserve is "not a dollar-friendly Fed," preferring to focus on monetary policy rather than the international strength of the currency. And further falls are still predicted, with the possibility of a euro being worth $1.45 by the year's end. The $1.40 barrier has been viewed by analysts as a key turning point in solidifying the euro's position in currency markets, the Wall Street Journal notes.