Will U.S Dollar Fight Back?

**intelligent** Mon Dec 04, 2006 5:39 am

Will U.S Dollar Fight Back?
This weekend the U.S dollar again slipped agitating financial markets and pushing the Euro and sterling strongly higher. The pound touched its highest level for 14 years against a beaten-up greenback while the Euro hit a series of 20-month peaks.

The U.S. dollar fell as low as $1.9847 against the sterling and to $1.3348 against the Euro last week before steadying. Over the week, the dollar lost 1.7 per cent against the Euro to $1.3322 and more than 2 per cent against sterling to $1.9798.

During the past two weeks, the U.S dollar has dropped 4 per cent against the Euro and 4.5 per cent against the sterling. The past two weeks’ fall have extended the dollar’s slide this year to about per cent against the Euro and 15 per cent against the pound.

Yielding to the risks to the dollar, the investors in US fixed income may want to consider broad and diversified exposure to non-dollar currencies.

If U.S dollar doesn’t fight back, then the U.S economy has to suffer a great loss.

In my opinion, if the U.S dollar continues to fall, then there may be deficit in the economy

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:P

**patanx** Mon Dec 04, 2006 10:05 am

Doubts on the Dollar
A longtime dollar bull has qualms, but strictly short term.

On Friday, the U.S. dollar plunged to a new 20-month low vs. the euro and 14-year nadir vs. the British pound. Plus, the dollar dropped to its lowest level in almost four months against the yen. The dollar's decline was blamed for the "crisis mentality" that had the stock market staggering the past week.

Rapid money growth in Europe means higher European interest rates and a lower U.S. dollar.

A scary new monetary phenomenon double-digit money growth is sweeping the developed world. In Britain, for instance, money growth is now 14.5% above a year ago. Sweden's money supply is up 14.4% over last year. For the entire euro region, the broad measure of money is up 8.5%. In Australia, the growth rate is 11.2%.

For more of this article, you can visit e-nvestments.blogspot.com