Weak dollar could lead to currency war

EUROPEAN Central Bank president Jean-Claude Trichet described the growing weakness of the dollar against the euro as “unwelcome” to the ECB.

His strong verbal intervention for the second time in a week is raising concerns that a currency war could hit the markets if the dollar’s demise isn’t halted.

Fear’s are growing that unless the US authorities act to halt the dollar’s dramatic slide Japan and the eurozone economies could be forced to intervene against the wishes of the US administration.