Dollar falls to 15 year low against the yen
As we covered in one of our earlier articles, the Federal Reserve in America has indicated that a number of fiscal stimulus programs will be introduced in the short to medium term to refloat the economy. Aside from the fact that funding will be required for these stimulus programs there is also a realisation that the US economy is struggling and in need of significant assistance.
As a consequence of the various factors mentioned above, investors have been selling the dollar aggressively and it fell to a 15 year low against the yen and a nine-month low against the euro. The weakness in the dollar has also pushed commodity prices to their highest levels for two years and the price of gold is moving higher again. There is no doubt that the US economy, and to a lesser extent the Far Eastern economy, is the engine room of the worldwide economy and if the US economy is struggling then the rest will follow.
Whether we are moving towards a situation affectionately called "credit crunch part two" remains to be seen but there are worrying signs ahead for the short to medium term.
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