Kiss the dollar rally goodbye

News Type: Opinion — Seeded on Tue Dec 16, 2008 3:32 PM EST

Article Source: CNN

business, economy, united-states, dollar, financial-crisis, euro, yen, financial-turmoil

one key reason the dollar had rallied against the euro in the late summer and early part of the fall was that even with the credit crisis starting to take hold, the U.S. was still viewed as more of a safe haven than Europe. But as more and more data point to an increasingly ugly picture for the U.S. economy, that may no longer be the case.

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{"commentId":4452563,"authorDomain":"handshake"}

Handshake

So it's probably not encouraging to see the dollar slowly drifting back up again. In this economy, consumers simply can't afford another piece of bad news that will hit them in the pocketbook.

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1 vote

#1 - Tue Dec 16, 2008 3:33 PM EST

{"commentId":4459906,"authorDomain":"mwestenfelder"}

Martin Westenfelder

One of the main reasons of the Dollar rally was not that the Dollar was perceived as relatively safe but that US banks liquidatedany foreign investment they could to secure enough liquidity for their ongoing US core operations.

.I don't blame CNN, most people get that wrong.

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3 votes

#2 - Wed Dec 17, 2008 8:30 AM EST

{"commentId":4461190,"authorDomain":"handshake"}

Handshake

Yes, I agree to a large extent. Your interpretation would mean that other currencies such as the euro could gain in their status as reserve currencies. Let's see how that develops.

{"commentId":4461190,"threadId":"446039","contentId":"2219411","authorDomain":"handshake"}

3 votes

#2.1 - Wed Dec 17, 2008 10:05 AM EST

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	Dollar extends decline a day after Fed rate cut	Associated Press	Fri Dec 12	0
	Euro rises against dollar to $1.4429	Associated Press	Fri Dec 12	0

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Kiss the dollar rally goodbye

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