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Day of reckoning looms for the U.S. dollar

Posted By admin On May 21, 2009 @ 3:42 am In Money Watch | Comments Disabled

Alia McMullen,
Financial Post [1]
Thursday, May 21, 2009

The U.S. dollar’s day of reckoning may be inching closer as its status as a safe-haven currency fades with every uptick in stocks and commodities and its potential risks – debt and inflation – are brought under a harsher spotlight.

Ashraf Laidi, chief market strategist at CMC Markets, said Wednesday a “serious case of dollar damage” was underway.

“We long warned about the day of reckoning for the dollar emerging at the next economic recovery,” Mr. Laidi said in a note.


Day of reckoning looms for the U.S. dollar 335x205 graph128c aj [2]

Mr. Laidi said economic recovery would weigh on the greenback as real demand for commodities, coupled with improved risk appetite, caused investors to seek higher yields in emerging markets and commodity currencies. This would draw investment away from the U.S. dollar, which was dragged down by growing debt and the risk quantitative easing would eventually spark a surge in inflation.

The U.S. dollar slid against most major currencies Wednesday, hitting a five-month low of US$1.3775 against the euro and pushing the Canadian dollar up US1.21¢ to a seven-month high of US87.69¢.

Full article here [1]

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URLs in this post:

[1] Financial Post : http://www.financialpost.com/news-sectors/story.html?id=1612964

[2] Image: http://www.efoodsdirect.com/products.html

[3] Dollar Crisis Looms if US Doesn’t Curb Debt: Experts: http://www.prisonplanet.com/dollar-crisis-looms-if-us-doesnt-curb-debt-experts.html

[4] HSBC bids farewell to dollar supremacy: http://www.prisonplanet.com/hsbc-bids-farewell-to-dollar-supremacy.html

[5] Dollar Falls Most In A Month Since 1985: http://www.prisonplanet.com/dollar-falls-most-in-a-month-since-1985.html

[6] Dollar hits 11-month high on global growth worry: http://www.prisonplanet.com/dollar-hits-11-month-high-on-global-growth-worry.html

[7] Global stocks slide anew, dollar sets 2-year high: http://www.prisonplanet.com/global-stocks-slide-anew-dollar-sets-2-year-high.html

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