U.S. dollar running into headwinds

The Sydney News.Net
Friday 20th March, 2009

The surprisingly strong U.S. dollar is running into headwinds.

The dollar has defied most analysts by stregthening at a time when the U.S. banking and financial system has been in all but a state of collapse. U.S. capital repatriation and short term foreign purchases of dollars as a safe haven, particularly in the purchase of treasuries, has boosted the dollar over the past few months.

Cracks however appeared this week when the Federal Reserve announced plans to buy $1.15 trillion worth of treasury bonds and mortgage-backed securities, in an attempt to lower long term interest rates.

In the days since the dollar has fallen more than 3%, and the speed at which it has fallen indicates there may be more declines ahead.

Around the New York close Friday the euro was quoted at 1.3560. The British pound was fetching 1.4435. The Japanese yen was changing hands at 95.91. The Swiss franc was firm at 1.1292, as was the Australian dolar at .6855. The Canadian dollar was quoted at 1.2416.

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Comments on this story

b obama
03-20-09, 10:44 PM

U.S. dollar on the brink

oh wishful thinking on behalf of the author...

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