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The Dollar Collapses
Carl Gutierrez, 09.08.09, 04:05 PM EDT
Commodities, stocks and foreign currencies all rise as investors sell dollars.
The U.S. dollar reached its lowest point against the euro this year due to a myriad of forces including rising global stocks and commodities prices, low interest rates, and investors diversifying out of Treasury debt and into other assets including U.S. stocks with the Dow Jones industrial average approaching 9500 in late afternoon trading.
Stocks in Asia and Europe saw big gains, and gold topped $1,000 an ounce. (See "Stocks, Commodities Rally After Long Weekend.") Oil also gained 4.9%, or $3.31, to $71.33, on the New York Mercantile Exchange, due in part to Goldman Sachs affirming its year-long outlook. By midday trading one euro traded for $1.45, meanwhile the Dollar Index, which tracks the greenback against a basket of currencies, fell to its lowest level since September of 2008.
http://www.forbes.com/2009/09/08/dol...d-nations.html
Sounds better from WSJ
Dollar Sinks to Low for Year
Investors Switch to Riskier Foreign Assets in Gamble on Global Economic Recovery
The dollar tumbled to its lowest level in nearly a year as investors fled a safe haven for riskier assets and worried that the U.S. economy could be a laggard in the global recovery.
The decline was broad, with the dollar falling against most major currencies, and dropping 1.1% against the euro.
As the dollar fell, investors bought up gold, which briefly crossed $1,000 an ounce, and other commodities. The dollar, down 3.7% against the euro this year, is now trading where it was before investors rushed into the U.S. currency to escape global market turmoil after Lehman Brothers collapsed.
Foreign Exchange Data
"What you are seeing is a broad reallocation of risk," says Rebecca Patterson, global head of foreign exchange and commodities at J.P. Morgan Private Bank. "People who bought T-bills and Treasury notes during the crisis are slowly exiting those positions to buy higher-yielding assets elsewhere, and often those assets are overseas, whether in China, Japan, Brazil, Australia or Europe."
Analysts said the dollar is falling victim to a kind of double whammy caused by the government effort to pump dollars into the economy.
...
Investors Switch to Riskier Foreign Assets in Gamble on Global Economic Recovery
The dollar tumbled to its lowest level in nearly a year as investors fled a safe haven for riskier assets and worried that the U.S. economy could be a laggard in the global recovery.
The decline was broad, with the dollar falling against most major currencies, and dropping 1.1% against the euro.
As the dollar fell, investors bought up gold, which briefly crossed $1,000 an ounce, and other commodities. The dollar, down 3.7% against the euro this year, is now trading where it was before investors rushed into the U.S. currency to escape global market turmoil after Lehman Brothers collapsed.
Foreign Exchange Data
"What you are seeing is a broad reallocation of risk," says Rebecca Patterson, global head of foreign exchange and commodities at J.P. Morgan Private Bank. "People who bought T-bills and Treasury notes during the crisis are slowly exiting those positions to buy higher-yielding assets elsewhere, and often those assets are overseas, whether in China, Japan, Brazil, Australia or Europe."
Analysts said the dollar is falling victim to a kind of double whammy caused by the government effort to pump dollars into the economy.
...
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