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Fears aside, dollar still the best in a bad neighbourhood
4 Mar 2010, 0025 hrs , REUTERS
NEW YORK: In just a few months, the market’s perception of the US dollar has turned 180 degrees. Last year, the world was worried about a dollar
crisis as the ballooning US budget deficit sparked fears the greenback may lose its status as the international reserve currency.
In recent weeks, however, dollar woes have been overshadowed by fiscal instability in Europe and problems elsewhere.
Many analysts expect the dollar to stay firm against most currencies this year. While the US deficit is still large, prospects for recovery appear better in the US than in Europe and Japan. That, along with the uncertainty surrounding the euro zone, should boost the attractiveness of the greenback as an investment.
“The fiscal negatives are a lot less from the US now than what they were a year ago,” said Aroop Chatterjee, currency strategist at Barclays Capital in New York. “Sovereign risk is less of an issue for the dollar and more of an issue for the euro area.”
4 Mar 2010, 0025 hrs , REUTERS
NEW YORK: In just a few months, the market’s perception of the US dollar has turned 180 degrees. Last year, the world was worried about a dollar
crisis as the ballooning US budget deficit sparked fears the greenback may lose its status as the international reserve currency.
In recent weeks, however, dollar woes have been overshadowed by fiscal instability in Europe and problems elsewhere.
Many analysts expect the dollar to stay firm against most currencies this year. While the US deficit is still large, prospects for recovery appear better in the US than in Europe and Japan. That, along with the uncertainty surrounding the euro zone, should boost the attractiveness of the greenback as an investment.
“The fiscal negatives are a lot less from the US now than what they were a year ago,” said Aroop Chatterjee, currency strategist at Barclays Capital in New York. “Sovereign risk is less of an issue for the dollar and more of an issue for the euro area.”
