Down Goes the Dollar (Um, More, That Is)
It's official, the Fed has a world reputation as the weakasses of central banking. While most central banks have reigned in the manic money-printing, the Fed continues to show that they're intent on flexing their money-printing muscle, even if it destroys the dollar in the process.
Can someone please let them know that this will not work anymore now that the world is waking up? Please?
The dollar dropped the most against the euro in more than a month and reached a 14-month low on speculation the Federal Reserve will trail other central banks in boosting interest rates.
Sterling rose against all of its major rivals this week on signs the Bank of England may suspend quantitative easing, reducing concern it’s flooding the market with new currency. The dollar slid as minutes of the Fed’s September meeting showed some policy makers were open to boosting purchases of mortgage- backed securities. The greenback may extend its decline when the central bank releases its Beige Book business survey next week.
“There’s no good news for the dollar,” said Dale Thomas, head of currencies in London at Insight Investment Management, which oversees about $121 billion. “The underlying trend is still for a gradual recovery of the global economy and a weak dollar.” The dollar will remain a “funding currency” for investors to buy higher-yielding assets as U.S. borrowing costs stay low, Thomas said.
The dollar fell 1.2 percent this week to $1.4905 per euro, from $1.4732 on Oct. 9, in the biggest drop since a 1.9 percent decline during the week ended Sept. 11. The U.S. currency touched $1.4968 on Oct. 15, the weakest level since Aug. 13, 2008. The yen declined 1.2 percent to 90.89 versus the dollar, from 89.78, in its biggest decline since Aug. 7. Japan’s currency depreciated 2.3 percent to 135.48 per euro, compared with 132.25 a week earlier.
Oh forget it. I think we all saw this coming from a mile away.