The falling dollar continues to raise eyebrows in the world financial market and now even more than that. Members of the G7 industrialized nations are now seriously warning against strong foreign exchange transactions. They believe this could create more financial instability.

This weeks’ financial data in regards to the dollar do not look good, in fact it appears that the U.S. is falling into a recession, and the dollar continues to fall against the Japanese yen and the euro.

The falling dollar, has also created other problems in the market such as the rise in prices for commodities such as oil, wheat and other items, which means that consumers just don’t have the money to spend. This will cause banks to rethink their interest rates and possibly lower them, and will keep some countries from basing their economy on the U.S. dollar.

At this rate inflation will soon be both a humanitarian and political problem too. Rising food costs because of rising commodities will seriously affect the years of work in trying to reduce poverty worldwide. Consumers are now worrying about filling their gas tanks, but others are now worried about filling their stomachs.

For a long time the G7 industrialized nations have warned that a countries economy should be based on the countries economics and not on other currencies, such as the dollar, but now they are emphasizing the principle even more. In fact this is a probably the strongest concert the group of 7 has expressed since 2000.

For now the financial world is only on alert, and there is nothing being done as yet to back up the dollar.

Some financial experts believe that any recovery that the dollar makes will only be a short term one until investors believe that the U.S. economy is on the rise again. Others say that although there is sure to be bad financial news this week, the dollar should slowly come back. It is believed that the U.S. Federal Reserve Board has almost finished the interest rate cutting period, and the European Central Bank will probably reduce rates before the end years, and that things will probably not get worse for the U.S. economy. This means that the U.S. dollar should recover on its own without any intervention.