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July 25, 2008 10:36:01 PM CDT

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Credit Squeeze's One Winner: The Dollar

Posted Aug 16, 07 12:59 PM CDT in US,  Business,  World 

(Newser) – After years of decline, the American dollar has reasserted itself in the face of the worldwide credit crunch. The dollar has rallied against the euro and the pound as banks and investors drop hazardous financial instruments and hold cash, Bloomberg reports, making the implication clear: For all its woes, the dollar remains the world's unrivaled reserve currency.

The dollar hit a seven-week high against the euro yesterday, and the climb is likely to continue; UBS has predicted that the euro will slip to $1.32 in the next three months. Banks paying back dollar-denominated mortgage securities are now finding themselves in competition with investment firms buying greenbacks in hopes of a further rise.

Source Bloomberg

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A money changer employee changes Euro and US Dollars on an exchange kiosk, in downtown Milan, Italy, July 5, 2005. The euro soared to a new high against the U.S. dollar on Tuesday July 10, 2007, reaching...   (Associated Press)
Paying attention to detail   ((c) Unhindered by Talent)
Traders gather at a post on the floor of the New York Stock Exchange Wednesday Aug. 15, 2007. Stocks wobbled Wednesday after briefly dipping below 13,000 as Wall Street kept a close eye on the Federal...   (Associated Press)
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