Foreign investors move from dollar
In recent days, foreign investors have been moving away from the dollar, assuming the Fed will cut interest rates again. Stephen Beard explains why they no longer consider the U.S. an investment safety net.
Frankfurt Stock Exchange (MARTIN OESER/AFP/Getty Images)
More on Investing, International, Europe
TEXT OF STORY
Steve Chiotakis: Overseas, they're keeping a close eye. While reaction stateside may be, "How low can it go?" In Europe, it's much ado about the dollar, and how it's trading against the Euro and other foreign currencies. From London, Stephen Beard reports.
Stephen Beard: In recent days, foreign investors have been moving out of the greenback. They assume the Fed will cut short-term interest rates again today. And that will mean that money deposited in the U.S. will earn a derisory return -- a half of 1 percent or less. And the dollar doesn't now seem quite as attractive a place for foreigners to put their money.
Professor Ian Marsh at the Cass Business School:
Ian Marsh: People are just looking for safety. America was the safe place to go, it probably is no longer because there's big uncertainty over what the Fed will do in the future.
Once the Fed has cut interest rates close to zero, it may have to resort to all sorts of unconventional measures to pump up the money supply and pull the U.S. economy out of recession.
In London, this is Stephen Beard for Marketplace.
Comments
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12/16/2008
Message to moderator: using Opera, you get two copies of my comments. I don't know why, I'm not hitting the button twice.
12/16/2008
Message to moderator: using Opera, you get two copies of my comments. I don't know why, I'm not hitting the button twice.
From Haleyville, AL, 12/16/2008
I'm not an economist, so I think in simple analogies (see my comment on Nov 25th 'What's the Fix'). I've been wondering what has been holding the dollar together now for some years. The Chinese have been afraid to call in their chits. If they ever think they can make it work... But learning Mandarin is SO hard!!!
From Haleyville, AL, 12/16/2008
I'm not an economist, so I think in simple analogies (see my comment on Nov 25th 'What's the Fix'). I've been wondering what has been holding the dollar together now for some years. The Chinese have been afraid to call in their chits. If they ever think they can make it work... But learning Mandarin is SO hard!!!
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