Dollar hits fresh 20-month euro low after mixed U.S. data,

The dollar tumbled to a fresh 20-month low against the euro Tuesday after a government report showed demand for U.S.-made durable goods declined much more than forecast last month.
But the U.S. currency edged slightly higher versus the yen after data showed an unexpected increase in sales of existing U.S. homes in October and a solid reading from the Richmond Fed’s manufacturing index.
Analysts say sentiment toward the dollar remains negative.

Dollar hits 20-month low against the euro – MarketWatch,

The dollar extended its sharp losses against the euro Monday, touching a 20-month low, but steadied against the yen, as traders awaited U.S. economic data this week.

Stock markets are reacting, Stocks sharply lower on dollar, Wal-Mart and FTSE 100 ends down, hit by weak U.S. dollar,

The FTSE 100 index .FTSE of Britain’s largest shares fell to its lowest close in seven weeks on Monday as the sliding dollar continued to weigh on stocks with U.S. exposure.

And metals, Gold, silver hit highs on dollar weakness,

Gold steadied on Monday after an earlier climb to its highest level in more than three months as a weaker dollar and firm oil prices prompted investors to buy the precious metal.

Over at Brad DeLong’s Semi-Daily Journal: Fair and Balanced Almost Every Day: The Dollar Looks 40% too High, and Long Treasury Yields Look 200 Basis Points too Low,

…Menzie Chinn worries about the possibility of a dollar crash:

One of the enduring oddities of the international economy is the willingness of foreign investors — both private, official, and quasi-state — to hold dollar assets despite the very low returns on such assets, even when comparing in common currency terms. It is this anomaly that Krugman disucusses in an academic paper asessening the possibility of a dollar crisis.

Concerns about a dollar crisis can be divided into two questions: Will there be a plunge in the dollar? Will this plunge have nasty macroeconomic consequences?

The message appears to be that the dollar’s value is out-of-whack–too high–because nobody expects it to decline by a lot in the near future, and that expectation means that demand for dollar-denominated securities is high because U.S. interest rates are higher than interest rates in Japan and Europe. One again, it looks like there may well be lots of money left on the table.

OK, that was a complicated series of quoting someone who is quoting someone who is quoting someone, so go sort it out at the original… the point being that the dollar is still WAYYYY too high, and that there is the possibility of a recession coming (see ‘Housing Bubble’ posts). He’s quoting from, Econobrowser, Will the Dollar Plunge? Would that Be So Bad?
Angry Bear on all this,

In other words, we can avoid a recession even as we move to fiscal restraint if we allow currencies to float.

When the dollar falls, it means that everything from other countries costs much more. This supposedly is great for American manufacturers because our goods will cost much less to others, and we can start exporting (and hiring) again. Possibly even heading off a recesion. But my question is, how much has our manufacturing infrastructure eroded? CAN WE start manufacturing for domestic and export to pick up the opportunity of a plunging dollar?

Yes, a new Seeing the Forest series: the falling dollar. We’re likely to be hearing a lot of news along this front in coming months. So I’ll be tracking it.
Dollar plunges to 19-month low against euro,

Growing pessimism over the dollar facilitated a sell-off Friday that plunged the greenback to a 19-month low versus the euro and a nearly two-year low against the U.K. pound.
[. . .] There is also mounting concerns that central banks around the globe might begin to aggressively diversify their foreign reserves into euros and away from dollars, the long-standing reserve currency of choice.
On Friday, China warned other countries that holding excessive dollar reserves may not be a good idea.
Wu Xiaoling, a senior People’s Bank of China official, said Friday that continued weakness in the U.S. dollar poses a risk for East Asia’s foreign-exchange reserves, Market News International reported.

U.S. Stocks Fall on Higher Oil, Weak Dollar; Retailers Decline,

U.S. stocks fell, snapping the Dow Jones Industrial Average’s two-week winning streak, after higher oil prices and a weaker dollar sparked concerns that holiday sales and economic growth may falter.

The U.S. Dollar is the Week’s Biggest Turkey,

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