Is there a trend brewing to move out of Dollars?
*Financial Times, by Peter Garnham, November 30, 2006
“Sterling hit its strongest level against the dollar in 14 years on Thursday as traders continued to put pressure on the beleaguered US currency.
The pound traded as high as $1.9588 against the dollar, its highest level against the greenback since its ejection from the European Exchange Rate Mechanism in September 1992.
Recent volatility on foreign exchange markets has forced economic factors into the background as short-term investors made a series of assaults on key technical levels in sterling/dollar.
Traditionally, sterling performs well in December as UK companies repatriate dollar earnings ahead of the year-end.
That move has been exaggerated this year against the dollar, which has come under severe pressure against all major currencies since late last week.
Dollar bears meanwhile, have been encouraged by a growing perception that US interest rates might have peaked and fears that global central banks were set to diversify their foreign exchange reserves away from the greenback.”
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