Another week, another set of losses for the dramatically diminishing dollar, which on Friday slumped to its lowest level since October 1997 in trade-weighted terms.
The continuing sell-off came amid a series of events that should, in theory, have aided the greenback. The
Federal Reserve released a broadly hawkish monetary policy statement, Thursday's US trade data was far better than feared, and the US Treasury declined to formally cite China for currency manipulation, a ruling that would have been expected to drive further Asian gains against the dollar.
Yet sentiment has turned so decisively against the greenback that it still fell, sliding a further 1.1 per cent to $1.2879 to the euro, 2.1 per cent to $1.8897 against sterling and 1.9 per cent to SFr1.2022 against the Swiss franc, hitting new one-year lows against each, and 1.3 per cent to Y110.50 against the yen. The dollar has now lost 6-8 per cent against each of these currencies since the start of April.
Meanwhile, lots of people are talking about the price of gold passing $700/ounce. On March 22, gold was around $550.
None of this is remotely surprising. I predicted this in March.
The good news is, you can do something about it by clicking here.
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Man... You are on a currency kick today, aren't you.
ReplyDeleteTwo great posts, nonetheless....