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Count the US Dollar Down, But Not Out

Fears of a looming currency crash are overblown

By Nick McMaster, Newser Staff

Posted Oct 23, 2009 4:25 PM CDT

(Newser) – With the US economy in a prolonged slump and the Fed likely to keep interest rates low for the foreseeable future, many worry that a dollar crash will be the next shoe to drop. Currency pessimists can point to a 6-month decline in the dollar; this week the currency hit $1.50 against the euro. But concerns of an imminent full-on crash are exaggerated—the dollar’s recent decline is a normal readjustment after the shocks of the financial crisis.

In the 6 months after Lehman Bros. collapsed in 2008, fearful investors took refuge in US Treasuries, sending the currency to an unnatural high. The dollar now is in fact close to where it was shortly before Lehman’s collapse. So fear not for the dollar’s short-term futures: the yuan and euro are not yet ready to supplant it as a reserve currency, and the global crisis proved that the dollar “is still a currency to flee to, not from,” the Economist writes.

A US dollar. (Wikimedia Commons)

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Count the US Dollar Down, But Not Out

Fears of a looming currency crash are overblown

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globalization • currency exchange • yuan • Lehman Brothers • euro • US dollar • weak dollar • financial crisis

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Lehman Lives on— and It's Getting Bigger

Financial giants refuse to die, Steven Davidoff explains

Japan, China Cut Currency Deal, Shun Dollar

Leaders also discuss North Korea

Euro Dives Below $1.30

Italian bond sale drives price south

George Soros: Double-Dip Recession Is Here

Rejection of stimulus a big mistake: investor

Feds Sue Big Banks Over Mortgages

US accuses them of dodging due diligence as crisis fallout spreads

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Count the US Dollar Down, But Not Out

Fears of a looming currency crash are overblown

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OTHER STORIES ON OUR RADAR

globalization • currency exchange • yuan • Lehman Brothers • euro • US dollar • weak dollar • financial crisis

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Lehman Lives on— and It's Getting Bigger

Financial giants refuse to die, Steven Davidoff explains

Japan, China Cut Currency Deal, Shun Dollar

Leaders also discuss North Korea

Euro Dives Below $1.30

Italian bond sale drives price south

George Soros: Double-Dip Recession Is Here

Rejection of stimulus a big mistake: investor

Feds Sue Big Banks Over Mortgages

US accuses them of dodging due diligence as crisis fallout spreads

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?