"Dollar hits fresh 15-year low"

[Prada]

http://www.ft.com/cms/s/0/e1281bc8-6...0779fd2ac.html

Might need to think about diversifying in foreign currency.


By Peter Garnham

Published: September 11 2007 12:04 | Last updated: September 11 2007 12:04

The dollar fell to a fresh 15-year low against a basket of currencies on Tuesday as the greenback continued to suffer from the prospect of a cut in US interest rates.

Expectations that the Federal Reserve would move to lower interest rates at its meeting on September 18 have increased since last week’s US employment report, which showed the recent turmoil in the credit markets had spilled over into the wider economy.

“The dollar remains undermined by the increasing prospect of monetary easing by the Federal Reserve as it attempts to forestall the US economy from slipping into recession,” said Derek Halpenny at Bank of Tokyo-Mitsubishi UFJ.

Analysts said a sharp rise in the price of oil caused by attacks on oil and gas pipelines in Mexico and doubts that Opec would raise its production quotas at its Vienna meeting had not helped the dollar’s cause.

Paul Robson at Royal Bank of Scotland said higher oil prices would be a short-term focus for the currency investors.

“Euro/dollar tends to be positively correlated with the oil price as it makes Fed rate cuts more likely and European Central Bank more cautious [over inflation],” he said.

The dollar fell 0.2 per cent to $1.3820 against the euro, just shy of the record low of $1.3852 it hit in July.

This helped the dollar index, which tracks its value against a basket of six leading currencies, fall to a low of 79.787, its weakest level since September 1992.

The dollar also edged 0.1 per cent lower to $2.0300 against the pound, but was flat at Y113.60 against the yen as the Japanese currency showed little reaction to data showing a jump in Japanese machinery orders in July.

Mansoor Mohi-uddin at UBS said the surprisingly positive figures should throw the probability of the Bank of Japan raising interest rates this year back into the mix.

“We maintain our view that the BoJ will hike its target rate to 0.75 per cent in October,” he said.

However, the yen failed make progress as a rally on global stock markets saw investors shy away from the low-yielding yen in favour of riskier, higher-yielding assets.

The yen slipped 0.1 per cent to Y157.00 against the euro and edged lower to Y230.50 against the pound.

Meanwhile, rising crude prices gave the currencies of oil producing countries a boost. The Canadian dollar rose 0.3 per cent to C$1.0475 against the dollar, while the Norwegian krone climbed 0.1 per cent to NKr5.6830.

Copyright The Financial Times Limited 2007

[ginkobulloba]

Oh man, the dollar sucks these days.

[NotSmall]

Ill blows the wind that profits nobody. - Shakespeare.

[eliteforce]

This is very bad, whats happening is stage 1 of bankruptsy..first the credit mess and housing slump will slow the economy; then US govt spending is too high with an expensive war (Congress will be authorizing another $150 B) less tax receipts and bigger debt, budget cuts-higher unemployment and a weak dollar makes for inflation

[DTBusta]

Bad, but not unseen ! What did we think an expensive war was going to do !? Specially with the Federal Reserve and there intrest rate cutting after 9/11 till 2005,Defaulting economy based on credit !

Its sad The Federal Reserve is creating more and more inflation with every pretend, non backed dollar they pump into the economy. A few weeks back we all read they pumped 39 Billion into the economy for liquidation right!? I hope that works, except I've heard they really pumped 200 Billion.. Either way it seems they are attempting to keep the economy afloat!!!


WAR With Iran anyone!? http://www.foxnews.com/story/0,2933,296450,00.html

[Prada]

Well in monetary and fiscal policy, there are two things to consider. Government income and government spending. As many of you have stated, government spending seems to be of more concern

[Prada]

BTW: Canadian dollar is almost at par, with a solid central bank. Things to consider besides the Euro and pound sterling

[Johny-too-small]

I went Europe this summer, no one even wanted to touch my dollar. I got owned. Fing 3 Euro for a 12oz water.

[kfrost06]

BTW: Canadian dollar is almost at par, with a solid central bank. Things to consider besides the Euro and pound sterling

^^I love your avy!

There are good things to a low dollar especially if your in the USA export business other countries will buy your goods because there currencies carry so much weight and that's one reason why the trade gap is narrowing for the USA even though oil prices have been climbing.

[Prada]

^^I love your avy!

There are good things to a low dollar especially if your in the USA export business other countries will buy your goods because there currencies carry so much weight and that's one reason why the trade gap is narrowing for the USA even though oil prices have been climbing.

Feel free to express your gratitude to Tia.

Yes it is quite beneficial to exporters.