Laurence Shute wrote:
So, what to make of this?
========================================= The dollar has been rising partly as a result of safe haven buying, but mainly because of demand for USD's by foreign companies which transact business in the currency and by foreign borrowers who need to service their US-denominated debt. The banks are hoarding, so the central banks have to supply loan guarantees and dollars from their forex reserves and swap lines with the Fed. The more the dollar appreciates against their own currencies, the greater the demand for USD's by foreign businesses and debtors in Europe and the emerging markets, driving the dollar up further. Look for concerted action soon to halt the dollar's rise which is wreaking havoc on foreign economies and further contributing to the collapse of US exports.
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