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By Edward Luce and Krishna Guha
The falling US dollar is giving ammunition to the critics of the Obama administration and fuelling broader concerns about the potential erosion of America’s reserve currency status.
The depreciation of the US dollar is sparking growing jitters among critics of the Obama administration over the potential loss of America’s reserve currency status. Economists point out that a declining dollar could prove a boon to the US economy in the absence of credible anxiety over inflation.
Republican politicians have highlighted the dollar’s slide as evidence of waning US power.
Sarah Palin, the former vice-presidential Republican candidate, on Wednesday sought to link the dollar decline to rising US indebtedness and dependence on foreign oil. “We can see the effect of this in the price of gold, which hit a record high today in response to fears about the weakened dollar,” she wrote on her Facebook site.