Yes it's a day of very light trading, but nonetheless the dollar is absolutely tanking today. As of 2:00pm EST the dollar is trading at
�0.7337 (�1 = $1.3630)Most notable is the rising yen. For the last four weeks pressure on the dollar has been venting upon the pound and the euro, but not the yen. Now the yen is at its strongest level in three weeks while the euro soars to daily record highs.
�0.5164 (�1 = $1.936)
But all the signs are that the European Central Bank and the Bank of Japan are going to let it ride.
The euro hit a fresh all-time high against the dollar on Monday after the prospect of currency market intervention from the European Central Bank looked unlikely.Bloomberg even raises the historical fact that Bush is the first president since the demise of Bretton Woods in the early 1970s to not intervene in currency markets. If fact, neither the Fed nor the ECB have intervened since September 2000.
Japan seems to be relying on its weak economic data to scare off yen speculators, and the US is more than happy to ride the dollar down so it doesn't have to do anything intentional about the trade deficit or the jobs deficit. Europe and Britain seem to be playing the weakest hands. That being said, the pound has weakened remarkably in the last week against the euro, down some 3% since last Monday. So maybe its just the Europeans who are really in a pickle.
$1.40, here we come!