Pressures Likely to Remain On Dollar

The U.S. dollar is likely to remain weighed down this week by mounting expectations that the Federal Reserve will adopt new stimulus measures, and the pressures on the greenback are unlikely to ease until more details of the Fed's plans are known.

The dollar has notched broad declines in the past month, slumping in recent sessions to landmark lows against some of its rivals. The Fed is considering whether to launch a program of quantitative easing, purchasing long-term Treasury bonds to push down long-term interest rates and boost economic growth. The market equates quantitative easing with printing money, so it has a damaging effect on a country's currency.

Monetary policy and currency levels have become dominant themes across asset classes in recent weeks and are expected to play a role as finance ministers and central bankers from the Group of 20 nations convene in South Korea this week.

Read Full Article from Wall Street Journal

- Posted: 2010-10-17 13:57:26

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