Dollar dips to new low

The dollar's free fall continued yesterday, declining another 0.94% against the shekel and settling at its lowest level since December 2007 - 3.482. The greenback is now off 9.5% in 2008.

Things weren't any rosier in Europe, where the euro rose to a new high of 1.5526 euros per dollar before closing the day at 1.5499.

Investors are concerned the U.S. Federal Reserve's plan to inject $200 billion into the banking system won't save the shaky credit markets from their ongoing crisis. They also believe the Fed is likely to continue lowering interest rates.

The Fed's announcement that it would extend banks with 28-day loans in return for mortgage debt paralleled similar notices issued by central banks in Europe and Canada that they would provide $45 billion in short term loans.

Most economists believe the Fed, which has lowered interest rates by 2.25% since September will have no choice but to continue dropping its rates at its meeting next week to help pull the U.S. economy out of recession.