This news bodes very poorly for the future of the US Dollar.

Central banks are shifting reserves away from the US and towards the eurozone in a move that looks set to deepen the Bush administration's difficulties in financing its ballooning current account deficit.

In actions likely to undermine the dollar's value on currency markets, 70 per cent of central bank reserve managers said they had increased their exposure to the euro over the past two years. The majority thought eurozone money and debt markets were as attractive a destination for investment as the US.

The findings emerge from a survey of central bank reserve managers published today and conducted between September and December of last year. About 65 central banks, controlling assets worth $1,700bn, took part and the results showed a marked change in attitude over the past two years.

Link.

President Bush might want Americans to believe that budget and trade deficits in the hundreds of billions each year don't matter, but today's news show that his lack of restraint could have dire consequences on the nation's economy. If the Dollar dies, blame must land squarely on the President. The buck stops there.