Dollar drops on reserve currency doubts

AFP
Wednesday, June 17, 2009

The dollar fell against the euro and yen on Wednesday after major emerging economies cast doubt on its long-term future as the world’s main reserve currency, dealers said.

In late morning trading in London, the European single currency climbed to 1.3867 dollars from 1.3838 dollars in New York late on Tuesday.

Against the Japanese currency, the dollar slipped to 96.30 yen from 96.42 yen on Tuesday.

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Leaders of the so-called BRIC nations — Brazil, Russia, India and China — had on Monday called for a “more diversified” currency system.

“The BRIC leaders are divided between supporting the US dollar — as it is the only choice for now — and advancing the march for an alternative,” said Phil McHugh, who heads the corporate foreign exchange desk at currenciesdirect.com.

• A d v e r t i s e m e n t

“The (BRIC) meeting… will affect future sentiment on the dollar,” he added.

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