Dollar Declines as Greenspan May Say Foreign Demand to Slow (Bloomberg)

[cthrumatrix]

Dollar Declines as Greenspan May Say Foreign Demand to Slow

Feb. 4 (Bloomberg) -- The dollar fell against the yen on speculation Federal Reserve Chairman Alan Greenspan may say in a speech today that foreign demand for U.S. assets will wane.

The U.S. currency dropped 1 percent versus the yen on Nov. 19, after Greenspan said ``given the size of the U.S. current- account deficit, a diminished appetite for adding to dollar balances must occur at some point'' at the European Banking Congress in Frankfurt. Greenspan is scheduled to speak on the deficit in a speech in London today.

``Whenever Greenspan has spoken recently the dollar has weakened and I don't think he'll change his tone,'' said Marios Maratheftis, a currency strategist at Standard Chartered Plc in London. ``He's made it clear that he's comfortable with an orderly decline in the dollar.''

snip

Demand for the dollar may be limited after Russia's central bank said today it plans to ``gradually'' raise the euro's weight in its currency basket from 10 percent.

Merrill Lynch & Co. currency strategists wrote in a report yesterday that central banks may increase their holdings of currencies other than the dollar as they seek to raise returns on their foreign-exchange reserves.


snip
http://www.bloomberg.com/apps/news?pid=10000087&sid=ak2UBJlrawak&refer=top_world_news#

Greenspan is telling us that foriegners are going to buy "less dollars" ... this is not good for interest rates, the stock market and inflation.

[Tighthead Prop]

1. He's giving a deficit speech in London?

That should be a short one. "Sorry folks, we're fucked."

[cthrumatrix]

3. part of the G7 Meeting..............

[Stuckinthebush]

2. As a lowly investor

Would it be wise to start purchasing Euros or other currencies and just stash them away somewhere?

[Stockholm]

5. Probably yes and no

Since Greenspan & Co have shown the will to raise interests you will find good investment possibilities within the US in a while,

Buying Euros could be an idea, but the decline has already gone so far that you have probably lost most of the opportunity to speculate.

[Stuckinthebush]

7. So the Euro probably won't rise more against the dollar?

n/t

[Stockholm]

11. Yeah a bit but the question is how much?

[Chicago Democrat]

16. I agree the real power is in the Yen...

They are still the export money making machine and Europe is not doing as well. Also the Japanese own a huge amount of our T-Bills, as a stakeholder in the dollar the Japanese Yen is somehow stronger in a way that I really dont understand. If we were still on the gold standard Japan and China would have it all. Instead they have all the T-Bills, which aint the same.

Its like japan and chine have us by the balls but we have them by the throats. They can make us tumble, but that makes them go down as well. And so it goes on... And Greenspan smiles and the value of investor assets go up because of the devalued dollar.

[Toots]

9. As long as Bush* is in the Whitehouse the dollar will weaken

You have four more years to make money. The euro will continue to blossom. By the time Bush* is through most of the world will have switched to the Euro as the most stable currency. You won't regret buying Euros.

[madrchsod]

4. gee sign me up for bush`s new ss plan

no one wants to talk about the future..the future where we are no longer the currency of the world. hmmm....in the near future this country is going to have to bleed the middle class of every penny it can just to cover bush`s debts...

[cthrumatrix]

6. BINGO.... this is not a small issue and our deficits are still not

going away after the dollar has depreciated over 20%.

[Commie Pinko Dirtbag]

8. Here's the dollar against the Brazilian Real

This image is dynamic -- if you open this thread tomorrow it will be updated.

It now stands at R$ 2.598

[cthrumatrix]

10. 9:37am 02/04/05 [C] CITI RUBIN: FEARS U.S. DEFICIT GETTING WORSE NOT BET

from Marketwatch... not a story...just a headline ...no link...

[xchrom]

12. recently, i can't make heasds or tails of what

greenspan is thinking.
that he is saying the devaluation of the dollar is good -- and the debt and deficit bad?

has he changed his ideas about the value of the dollar and paying down the debt?
has he specifically stated that?

our debt and deficit aren't going anywhere -- and the trade deficit seems to say people don't want american goods and services either -- so i'm confused.

[cthrumatrix]

13. it's all very intergrated and complicated... we are not in a good position

our national debt, individual debt...our trade deficit and countries thinking about changing to the Euro and/or holding less dollars in reserves.

Either way it's trouble.

[nolabels]

15. This is a recipe for more war

We already have little ones raging 24/7, but we will need bigger ones to keep the publics mind off on how Effed up the REAL state of the nation is. The idiots running the government couldn't work their way out of wet paper bag without a complacent oligarchy and a brainwashed public.

The people at the levers have done a lot weaving to get things like they are now, when crunch time comes, stand back, it could get ugly.

[plasticsundance]

14. FYI for the speculators

http://www.cumber.com/comments/112204.htm

I'm not endorsing the view or the number, but some might be intrigued.

[Chicago Democrat]

17. Perhaps by 2006... if nothing changes....

Which it looks like the same old train is headed straight off the cliff with nothing to stop it.

[amandabeech]

18. The article lists countries which either peg their currencies to

the dollar, and those that manage the float to follow the dollar (the "dirty float"). Surprisingly, at least to me, the article does not list Japan as maintaining something of a dirty float.

Although Japan has allowed the yuan to drop from about 130 to the dollar to 103 to the dollar, the Japanese have been holding at 103 no matter what else happens, and traders seem concerned that the Japanese central bank will intervene strongly below that level.

I have read that the Japanese cannot let their currency drop more without losing export markets to the U.S. That would limit Japan's export-led economy further to internal Japanese consumption, which does not begin to approach the U.S. on a per capita basis.

My thinking, then, is that the Euro and other free-float currencies may take even more of a hit if the Japanese do not abandon their at least quasi-dirty-float.