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Will fear of automaker bankruptcies cause a flight to safety?

*Reuters, by Steven C. Johnson, March 30, 2009

“The dollar and yen rallied on Monday as fears of bankruptcy for U.S. automakers General Motors and Chrysler prompted anxious investors to cut exposure to risk and seek safety in the U.S. and Japanese currencies.

The euro continued to retreat from last week’s two-month high above $1.37, falling below $1.32 after Spain was forced to take over a regional savings bank, its first rescue since the financial crisis began, and Hungary’s credit rating was cut.

That added to selling by those anticipating a cut in euro zone interest rates this week and increased the appeal of the dollar and yen, which tend to rise in times of trouble as investors repatriate funds from higher-yielding currencies and relatively riskier assets such as stocks.”

*This information is solely a highlight of the opinion of a third-party publication and is incomplete.  Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.