U.S Dollar Collapse In Process: America’s Credibility Is Eroding, China and Japan May Step Up Push For Alternative Currency,Investors Around The World Are Saying “Lets Go Into Gold, Lets Get Out This Dollar”
October 18th, 2013
Dollar Slips as Fed Worries Continue
Treasury Yields Fall as Investors Focus on Effects of Government Shutdown
Expectations that the Federal Reserve will have to keep its easy-money policies in place for longer following the partial U.S. government shutdown pushed the dollar close to its lowest point of the year against the euro and U.S. Treasury debt prices to their highest point since July.
Yields on the 10-year Treasury note, which move inversely to prices, touched 2.538%, the lowest level since July 24, according to CQG. The dollar continued its slide against major rivals, including the yen and pound. The pound traded just above the $1.62 level for the first time in two weeks. The greenback fetched ¥97.75 from ¥97.93 late Thursday. The euro lost early gains versus the dollar, buying $1.3672 from $1.3676.
The drop in the dollar and the rise in Treasury debt prices were set in train earlier this week after lawmakers reached a temporary solution to raise the so-called debt ceiling, showing that investors doubt the Fed can start to reel in its stimulus measures—a process dubbed tapering—for as long as economic performance and data is compromised by the now-ended shutdown, and as long as the risk of repeat shutdowns lingers.
“As policy remains uber accommodative, the dollar has adjusted downwards,” said Scott Jamieson, head of multi-asset investing at Kames Capital in London, with $24 billion under management.