The Dollar

This losing streak of the dollar, which has coincided with the improvement of the stock since March, has gained momentum since the last months. The currencies of the major producers of raw motherland have soared against the dollar. The very weak dollar could help to support it later this year, according to analysts and inverosres. The problem is that if the euro and the yen will continue to strengthen cost more expensive European and Asian exports in international markets. A few months ago there was speculation that some banks have bought dollars Europeras to continue to keep its exports competitive. For example the growth of Germany, Europe's largest economy remains dependent on exports and the decline of the dollar could impact significantly on its economy. Another factor to be considered against the dollar are the operators who have made a very high volume of bets against the U.S.

currency and may consider that it is time to take profits. Also another important factor is the risk that exists in gains that are occurring in interest rates, which can generate a major crisis in emerging markets and to attract investors back to the dollar. Beyond the dollar has absorbed significant losses, the sterling performance was even weaker. The pound gave up 2.6% against the dollar and 7.2% against the euro during the third quarter. This decline came after the British currency rebounded by 15% against the dollar during the second quarter. Many investors believe that the British economy is in a vulnerable position on the effects of the financial crisis can leave and few are those who believe that the Bank of England will raise interest rates any time soon.

For many months the dollar trended down after it announced positive news and investors interpreted as a sign it was time to abandon safe investments such as the American currency to go for more risky and profitable investments. Simon Derrick, currency analyst for Bank of New York Mellon in London said the euro could be placed close to us $ 1.55, compared to the current level is 1.46 us $. Derrick said that efforts are being carried out by the U.S. government to inject money into the economy have reduced considerably the cost of borrowing in dollars, at a time when American assets offer returns too low. But with regard to operators, they are asking for dollars borrowed and used to finance investments in currencies that offer higher returns, which in the parlance of Wall Street is known as the carry trade which tends to reduce the cost of money that is borrowed . Derrick describes it almost like a flight from the dollar.