US greenback on the skids

By Prieur Du Plessis
12 August 2009 @ 09:12 am EDT

The financial and economic turmoil behind the dollar's appreciation earlier this year has eased significantly. Improving fundamentals and increased appetite for risky assets such as equities have reduced the dollar's appeal as a haven, and it appears to have peaked as the equity market bottomed out. Investors are showing an increasing appetite for commodity and energy assets. The apparent success of China's stimulus has boosted demand for raw materials, which has increased the appeal of commodity currencies, including the Australian and Canadian dollars, as well as emerging-market currencies, including the Brazilian real. The early recovery in Asia should bolster the commodity currencies and put further downward pressure on the dollar in the near term.

International Business Times

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