Value Of Dollar To Decline Further
March 6, 2008
According to many currency experts, the US dollar is predicted to weaken further in the near future. The dollar has been enduring severe losses in the past few weeks, and according to analysts, it is only going to get worse.
Many analysts are of the view that the greenback is going to be in a bad state until the middle of the year. It is believed that it will receive some sort of relief after this point.
The main reason for the massive decline in value of the dollar this week, is due largely to statements made by the Federal Reserve chairman last week. Ben Bernanke, Federal Reserve chief, had mentioned during his testimony at Capitol Hill last week, that the Federal Reserve might implement another rate slash during the Federal Reserve’s meeting in March, which resulted in the dollar losing a lot of ground.
Bernanke’s words, along with the other issues already facing the dollar, where enough to send the value of the dollar down the drains. This drop saw the Dollar touching decade lows against many currencies; the Japanese yen, Swiss Franc and the Malaysian ringgit are some of the currencies against which the dollar took an especially large fall. Last week the dollar hit its all time low against the Euro.
Most currency strategists are saying that the weak value of the currency is indicating the economy of the nation is going to go from bad to worse. The dollar last week was very consistent in recording all time lows against the Euro.
Currency analysts are very sure that the dollar is going to stay in its current state for the next month at least, if not longer. The dollar is going to go even further down if the employment report that is scheduled to come out later this week also turns out to be as bad as economists are forecasting. If it indeed turns out to be a depressing report the result might be that the dollar hits rock bottom.
As per the forecasts that have been made recently the dollar is going to hit a top of $1.55 to the fifteen nation currency very soon and this it will drop further in front of the Japanese Yen. The fall might be as low as ¥101 or ¥102.
Although currency experts are united in saying that the dollar will recover towards the middle of the year, as the economy of the nation starts to get back on its legs. The dollar again would reach a more stable position as soon as the Federal Reserve puts a stop to the rate slashes it has been employing so frequently nowadays.
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