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Investments News Wednesday 7th November 2007
Dollar falls to new lows against sterling and the euroFurther falls for the dollar today see it at a new record low against the euro. Wednesday has also seen the dollar at its lowest against the pound in 26 years. The euro peaked at $1.4730 before falling back slightly towards the end of the day, while the pound topped out at $2.1046, its highest level since 1981. This all comes the day before both the Bank of England and the European Central Bank are due to reassess interest rates.This most recent slump is attributed in part to comments from Cheng Siwei, one of China's leading politicians, in which he stated that “We should take advantage of the appreciation of strong currencies to offset the depreciation of weak currencies.” It has long been known that China is moving away from dependence on the dollar as Chinese holdings in US bonds and notes has decreased by over $20bn in the last 8 months to just under $400bn. This is part of a growing trend as sentiment regarding the US dollar across the globe shifts. Various global currencies including the Canadian and Australian dollars, Swiss franc, Chinese yuan and South African rand all hit record highs against the US dollar recently. These changes have a double pronged effect. One the one hand the US becomes a more attractive destination for foreign tourists and US corporations are able to increase their profits by offering exports at more competitive prices. On the other hand, overseas vacations are more expensive for US nationals and foreign companies face either decreasing profit margins or price increases on goods exported to the US. Other Investments Recent News and ArticlesWhen Is the Best Time to Start Investing » Settlement of Trusts and Acting as Trustee or Protector » |
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