[lbo-talk] Prospects and consequences of a devalued USD

[Marv Gandall]

The prevailing wisdom, of course, is that it's still seen as the safe haven currency which correlates inversely with the rise and fall of market fears about a sustainable recovery from the global downturn. When fears ease of a double dip, the dollar drops as investor move into riskier assets, and vice-versa. The euro has also come down against the USD because of the fiscal crises in Greece and the other weaker eurozone countries. The relative strength of the yen given long stagnant Japanese growth is another puzzle, although the unwinding of the yen carry trade and Japan's current account surplus may provide some explanation. If the renmindi traded freely in currency markets, you'd probably see a big movement into it from the USD and other major currencies. But maybe there are some FX traders on the list who have a better understanding of these gyrations. 

On 2010-02-01, at 11:23 AM, Doug Henwood wrote:


> The funny thing about all this is that everything Garten says is already well known. So why has the dollar been holding up despite that? Might it be that no one else is in such great shape either?
> 
> Doug
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