The dollar extended its slide against the world's other major currencies Friday on expectations that the Federal Reserve will keep interest rates low to nourish U.S. economic growth despite rising oil and food prices. Central banks overseas are increasing interest rates to fend off inflation, making their currencies more attractive to investors seeking higher yields. But Fed Chairman Ben Bernanke has said rising commodity prices will have only a temporary effect on broader inflation in the U.S. So investors expect the key U.S. rate to stay near zero to help fuel domestic economic growth while millions are out of work. The government said Thursday that economic growth in the first three months of the year slowed to an annual pace of 1.8 percent from 3.1 percent at the end of 2010. The euro was worth $1.4839 late Friday, up from Thursday's rate of $1.4821. The euro has barreled up more than 4 percent just in April, and is up 9.5 percent this year despite ongoing concerns about high debt levels and stagnant economies in some of its member countries. Expectations that the ECB will keep lifting rates as prices rise are boosting the euro. The EU said Friday that inflation in the 17 euro countries rose to 2.8 percent in April from 2.7 percent last month. The euro peaked at $1.4881 late Thursday, its highest level since December 2009. The dollar is losing ground against currencies all over the world, reflecting worries about the growing budget deficit in the U.S., said Bank of America Merrill Lynch foreign exchange strategist David Woo in a research note.

Source