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 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.
While Americans were busy digesting their Thanksgiving feasts, the rest of the world was barfing up dollars. As a result of our massive trade deficits, foreigners certainly have their bellies full of them. This week’s action in the Forex markets indicates that they may have finally eaten their fill. Unfortunately, the bad taste will likely linger as the dollar’s rout has only just begun.