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mpc: 2 The Bank's effective sterling exchange rate had risen by around 1½% over the past month. Unlike the pattern of the previous month, when sterling had depreciated against the euro and risen against the dollar, sterling had appreciated against both the dollar and the euro. But the main exchange rate news this month had been the further fall in the US dollar. The effective dollar exchange rate index was now significantly below its peak in early 2002 and had fallen to a nine-year low. As usual, it was difficult to isolate the precise trigger for the recent depreciation, particularly since commentators had been talking about the risks of a depreciation of the dollar for a considerable time given the United States' present fiscal and current account deficits. It was noted that the elimination of the, rather smaller, US current account deficit in the 1980s had been accompanied by a fall of around 30% in the dollar's real effective exchange rate.