Sinking dollar sends oil sky high

The dollar slid to a new low against the euro today, sending the price for a barrel of crude oil to a new record high. The value of the dollar slumped to $1.481 euros, following the release of the Federal Reserve's October meeting revealed that the U.S. economy would grow at a 1.8% to 2.5% rate in 2008, down from the 2.5% to 2.75% clip forecast in June. "The market is trading on fear," said Jay Mueller, a Milwaukee-based senior portfolio manager at Wells Capital Management in San Francisco. "Traders are taking a flight to safety and quality scenario." Traders fear that in order to remedy the problems with U.S. mortgage-related securities, the Federal Reserve will again cut interest rates, which does not help improve the value of the dollar, said Mr. Mueller. The weaker dollar sent the price of a barrel of light sweet crude oil up as much as $3.66 to a high of $98.30, before closing up $3.39, or 3.6%, at $98.03 in trading on the New York Mercantile Exchange.