Dollar's fall has pluses, minuses

NEW YORK — The U.S. dollar's recent decline against the Canadian dollar, the euro and even the Indian rupee means Americans will pay more for imports and trips to Paris, Rome, Bangalore and Toronto. It also may drive overseas demand for U.S. goods and help raise profits at U.S. multinational corporations.

The decline, however, does not mean the dollar is facing a meltdown.

Thursday's drop is of greater concern to currency markets than U.S. households, except "if you're a connoisseur of French wines or Canadian maple syrup," said David Gilmore, a partner at Foreign Exchange Analytics in Essex, Conn.

A lower dollar makes U.S. exports more competitive, which is good news for American manufacturers but spells rising prices for imports to the U.S. The dollar's decline also diminished the spending power of American tourists while attracting foreign visitors to the U.S.

The Federal Reserve on Tuesday announced a dramatic half-point cut in its benchmark interest rates. While aimed at shoring up U.S. credit markets, the cut further weakened the dollar against other currencies.

The U.S. currency plummeted to a new low Thursday against the 13-nation euro, which traded above $1.40 for the first time since it was introduced in 1999.

The dollar also dropped to a nine-year low against the Indian rupee.

The falling dollar helps multinational corporations because it makes American-made goods more affordable in international markets while making it harder for foreign manufacturers to undercut domestic competition.

On the other hand, it scares off foreign investors who help finance the U.S. debt. That eventually could push up borrowing costs for all Americans.