CHESAPEAKE, Virginia (Reuters) - U.S. presidential candidate Barack Obama said on Thursday that high budget deficits were weighing on the value of the dollar because they must be financed through borrowing from overseas.

Obama was asked at a town-hall meeting in Virginia if he thought the United States should return to the gold standard, given that the weak dollar is exacerbating the rise in oil prices.

The Democratic White House hopeful said he did not think a return to the gold standard was a good idea and noted that the U.S. currency was strong in the 1990s, even though there was no gold standard. Obama blamed the U.S. currency's decline on President George W. Bush's fiscal policies.

"When George Bush came into office we had surpluses as far as the eye could see. Now, we've got what looks like a half-a-trillion dollar deficit a year and we've added $5 trillion to the national debt," Obama said. "That is contributing to the weakening dollar. It means that over time, we have to borrow money to finance what we're doing."

He touted his economic plan as one that would help reduce the deficit.

(Reporting by Caren Bohan; editing by Eric Beech)