Dollar continues its plunge

The dollar fell to historic lows against the euro driven by concerns that China would move reserves out of the U.S. economy. Cheng Siwei, vice president of the Standing Committee of the National People's Congress, was quoted by wire services as saying that China should balance its $1.43 trillion stockpile of reserves with strong currencies such as the euro to offset weak ones such as the U.S. dollar. The comments sent the euro climbing to a new all-time high of $1.4730, up 1.2% from the day earlier. "China is being a rational investor," said Carl P. Kaufman, vice president at Osterweis Capital Management in San Francisco. "There comes a point when a weak dollar is no longer a bargain." Mr. Kaufman said that the dollar will continue to fall as long as the Federal Reserve continues to cut interest rates. "We need to fix the actual problems with the economy and increase confidence in the banking system," he said. The market is going to continue at its current pace until a realistic write-down number is known, Mr. Kaufman added.