Will the dollar decline as the fear of a global financial crisis subsides?
*Bloomberg, by Ye Xie , May 13, 2009
“Dollar Trades Near Lowest Since March on Pared Safety Demand
The dollar traded near the weakest level versus the euro since March as evidence the worst of the global economic slump may be over pared demand for safety.
The pound rose yesterday to a four-month high against the greenback as reports showed the U.K.’s housing slump eased and factory output shrank at the slowest pace in more than a year. The yen gained against all of its major counterparts as increased currency volatility discouraged investors from borrowing in Japan to buy higher-yielding assets elsewhere.
‘We will continue to see dollar weakness,’ said Ken Jakubzak, a manager in Chicago at the hedge fund KMJ Capital LLC, who was buying the euro versus the dollar. ‘Risk appetite is the name of the game. Risk aversion has subsided. People are looking at repositioning themselves for a recovery.’ “
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