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The Dow Reaches A Record While The Dollar Drops

SUSIE GHARIB: The Dow is at a record high tonight -- 12,803 -- and is closing in on the 13,000 milestone. The blue chip index rose 30 points today thanks to strong earnings from Dow component stocks Intel and JPMorgan Chase. Meanwhile, the U.S. dollar is headed to a record of its own, an all-time low against the euro. It traded at $1.36 against the euro and at above $2 against the British pound for the first time in more than in a quarter century. Scott Gurvey reports.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: The dollar continued to take a beating in currency trading today as the Bank of England released minutes of its last policy setting meeting, indicating it will leave interest rates steady at 5.25 percent due to signs of rising inflation. The dollar hit a 26-year low against the British pound and is approaching an all-time low against the euro. Currency strategist Marc Chandler at Brown Brothers Harriman says those two currencies set the tone for the market.

MARC CHANDLER, CURRENCY STRATEGIST, BROWN BROTHERS HARRIMAN: When the dollar is selling off against the euro, against the British pound, that sort of acts as a weight that's dragging the dollar down against a whole host of currencies like the Canadian dollar, like the Australian dollar. The U.S. dollar is also weak against some of the emerging market currencies where people are attracted to high yields, like in Brazil, in Mexico, in South Africa and Turkey.

GURVEY: The weak dollar means trips abroad will be more expensive for American tourists, but it should increase the number of visitors to the United States. The weak dollar will increase the price in the U.S. of products manufactured overseas, but should help exporters by lowering the relative price of goods made in the U.S. Many currency analysts expect the market to stabilize in the near term, but remain concerned the U.S. is at the end of a business cycle. They point to signs of a weakening American economy and speculation interest rates in the U.S. will decline while rates elsewhere rise. Naomi Fink of BNP Paribas thinks the dollar has further to fall.

NAOMI FINK, CURRENCY STRATEGIST, BNP PARIBAS: We're going to have to see U.S. households, households build up savings again. We're going to have to see the current account deficit narrow a little bit. We're probably going to have to see the Fed cut rates, the dollar decline further before it actually reaches a bottom and before U.S. assets become desirable to overseas investors and they really start aggressively building U.S. assets again.

GURVEY: The Federal Reserve has kept rates stable since last August, while the European central bank has raised rates seven times in the last year and a half. Scott Gurvey, NIGHTLY BUSINESS REPORT, New York.