Dollar falls with no end in sight
The dollar fell a fifth straight week against the euro, the longest slide since August, after the Federal Reserve indicated it may pause after boosting its benchmark interest rate for 16 consecutive meetings.
Investors have driven the U.S. currency down 8.3 percent this year against the euro and 6.6 percent versus the yen on speculation the Fed is approaching the end of its rate increases, while central banks in Europe and Japan lift rates. Eight Fed rate increases last year pushed the dollar up about 14 percent against both currencies.
The dollar is falling, and has been falling pretty steadily all year. Plus there is no end in sight. The Bank of Japan has been trying to drive the yen down by selling massive amounts, but the yen continues to climb vs the dollar.
Market watchers are now saying that non-US companies are looking at pulling invested money out of the US. This could easily trigger a feedback cycle that will drive the dollar much lower.
On a somewhat unrelated note, gold is at a 26 year high. The dollar drop has been paralleled by a sharp rise in gold. It appears that investors are moving dollars to gold. A combination of the irrational belief that gold is more valuable or stable and a rational belief that gold will be a good way to avoid dollar decline risks.
Jay
