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By Mike Conlon | November 23, 2009
From Bloomberg:
Nov. 23 (Bloomberg) — The dollar fell the most in two weeks against the euro after President James Bullard of the Federal Reserve Bank of St. Louis said policy makers should keep stimulus measures in place beyond March.
“It’s probably been weighing on the dollar,” said Brian Kim, a currency strategist in Stamford, Connecticut, at UBS AG. “It’s another sign that they’re trying to go slowly on this.”
The U.S. currency slid against almost all of its 16 major counterparts as Bullard said in New York yesterday that the central bank should extend its purchases of mortgage-backed securities to give the Fed “the option to react to future news.” The yen and dollar weakened against currencies led by the South African rand and New Zealand dollar as commodities and stocks advanced, spurring demand for higher-yielding assets.
So in a nutshell– the Fed plans to encourage inflation by keeping rates so low that it no longer makes sense to hold dollars and you’d be better off invested in just about anything else.
So the risk-taking trade is on the table to today, with the USD down against all major currencies. Also to note is that gold made a new high and that for the first time in 7 DECADES, US Treasury Bills have NO yield and are paying NO interest.
Yikes. So expect the path to US dollar destruction to speed up as investors seek out higher yields.
To learn more about how to protect your wealth and take advantage of the this disturbing trend, check out our currency trading courses.
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Topics: What To Look At In The Market | 1 Comment »
November 24th, 2009 at 6:35 am
Good commentry. Yes, I see your point. It’ll be an interesting start to 2010 !
Regards,
ForexPhil