Over the past two years the dollar has lost almost 23% against the euro. One year ago, at the beginning of 2004, $1.25 could buy one euro. A year later, a euro is worth $1.37, nearly 12 cents more. The dollar has declined mainly because private investors are, according to this Economist article, "less eager to finance America’s huge current-account deficit." The overall 2004 deficit was $413 billion, and in the third quarter of 2004 it reached a record of $165 billion, or 5.6 percent of GDP. A further decline in the dollar will most likely cause interest rates to soar in the United States. The administration needs to act to prevent this by reining in the trade and budget deficits. For more information on the dollar, check out The Federal Reserve, The Institute For International Economics, and this issue brief put out by the Economic Policy Institute.