Friday, October 21, 2011

U.S. Dollar at Post World War II New Low Vs Yen; New Curency Wars In a Race to The Bottom

When you thought the Euro was dead, here come the U.S. probems again. It's  a race to the bottom for currencies. We are just waiting for the Bank of Japan to act now to fight the Yen's appreciation.

"The dollar fell to a post-World War II low against the yen on speculation further monetary easing by the Federal Reserve will debase the U.S. currency".

Scary indeed.

Bloomberg: "The rise in Japan’s currency raises the possibility of further intervention by authorities to stem its gain. The euro rose for a fourth day against the dollar, in the longest stretch of advances since July, before two summits in five days at which European policy makers will discuss a plan to resolve the region’s debt crisis.

“The dollar is coming under pressure across the board at the moment,” said Derek Halpenny, head of European currency research at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “That’s just triggered some stops around the 76.40 to 76.50 level, which has pushed yen a bit stronger.”
"Fed Governor Daniel Tarullo’s call for resuming large-scale purchases of mortgage bonds may boost chances the central bank will start a third round of asset buying aimed at reviving U.S. growth".

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