Sunday, August 17, 2008

Surge for the dollar as global fears rise.

For years now people have been saying that our fiscal policies were undermining the value of the dollar (some truth in that) and the trend toward the the Euro signaled an end to the dollar as the worlds principal reserve currency. But that argument only made sense if Europe's underlying economic fundamentals were better than ours-and they aren't. Add an increasingly erratic and dangerous Russia to the mix and what do you have?

Against sterling, the US currency notched up its 11th consecutive day of gains – its longest uninterrupted rise in more than 35 years – as markets became increasingly convinced that the US was best-placed to weather the global downturn.

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