Sunday, September 27, 2009

World Bank: U.S. Should Not Take For Granted Dollar Being The Reserve Currency, Euro to Advance

Bloomberg reports that World Bank's President Robert Zoelick says the U.S. should not take for granted the dollar’s status as the world’s main reserve currency. His comments will actually be published tomorrow, Monday. He says "the next upheaval in the international economic order is under way as emerging nations gain greater influence. The United States would be mistaken to take for granted the dollar’s place as the world’s predominant reserve currency,” according to notes released today by the bank itself.

Of course Timothy Geithner last week at the G20 meeting defended the dollar’s role as the world’s reserve currency. saying the U.S. has a “special responsibility to preserve confidence in its financial system, and to sustain the dollar’s role as the principal reserve currency in the international financial system,”.

It would seem thar very few people at this point believe what Mr. Geithner or the fed say about the strength dollar. Words are cheap.

Zoelick said that Central banks “argued that damage to the real economy of jobs production, savings and consumption could be contained, once bubbles burst, through aggressive raising of interest rates,” Zoellick said. “They turned out to be wrong.”

In the meantime, Angela Merkel and her affiliates won the election in Germany to remain in power. “It is positive for the euro and slightly negative for bunds because the Free Democrats are more economically friendly in their policies,” said a strategist with DZ Bank AG In Frankfurt.
It should be another interesting week for U.S. Dollar.

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