Dollar's drop challenges U.S. power

NEW YORK: The United States may have no military equals, but the challenges to its financial power have become impossible to ignore.

A stark reminder came on Friday when the weakening dollar slumped to a record low against its main rival, the euro, after the U.S. economy recorded its fourth consecutive quarter of below-trend growth. The euro hit a record high of $1.3680.

The strength of the dollar is more than just a matter of bragging rights. Experts say the consequences of its long-term decline could have deep significance - for average Americans and for the country's position as an unrivaled global power.

Over time, the forces behind its decline could further marginalize the United States on the world stage, lower its standard of living and tie its hands in responding to crucial security issues or financial crises.

"We can no longer view ourselves as king of the hill," said Leo Melamed, chairman emeritus of the Chicago Mercantile Exchange and founder of the world's first market for financial futures. "There are a lot of other potential kings now vying to take our place."