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Currency Regimes May be Tested in the Face of Dollar Weakness
By DailyFX Updates | November 12, 2007
Here is a great Weekly Article that David Rodriguez one of our Currency Analysts at FXCM writes on Mondays. It’s a compilation of bank research.
The USD has to some extent lost its safe-haven status in connection with the ongoing financial market turmoil. In part due to the weaker USD and lower interest rates in the US we are probably heading for a period when currency regimes around the world will be increasingly questioned. Most obvious, of course, will be the countries that fully or partly peg their currencies to the USD - which is primarily a number of countries in Asia and the Middle East. In Asia there has been speculation in recent weeks on a major revaluation of the Chinese CNY and a widening of the fluctuation band for HKD. Put simply, the costs of maintaining the link to USD have been rising.
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