International Economics

When It Comes to Dollars, More Is Not Necessarily Merrier

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From Bloomberg.com:

The greenback posted the biggest weekly drop against the currencies of six major U.S. trading partners since the Plaza Accord almost a quarter century ago on speculation the Fed is flooding the market with dollars…

Still, don't worry that this is going to cause any possible problems down the line. Or, well, at least not for three months. After all, it isn't as if investors or lenders have any safe paper currency to flee to:

David Woo, global head of foreign- exchange strategy at Barclays Capital in London [says] "Over the next three months, I don't see much downside for the dollar to the extent other central banks will be under pressure to follow the Fed's lead and essentially go down the route of quantitative easing."

Gold has fluctuated between $893 and $993 an ounce in past month, in the mid-$950s this week.