The Euro strengthened against the Dollar !

The Euro strengthened against the dollar late Friday trading in New York , in a fearful market increasingly a budget impasse in the United States and attentive to the speech of several officials of the U.S. central bank. The euro bought 1.3519 dollars against 1.3485 dollars on Thursday at the same time. The European single currency fell against the Japanese currency to 132.88 yen against 133.51 yen yesterday. The dollar also fell against the Japanese currency to 98.24 yen against 99.00 yen on Thursday. Before a crucial deadline in the United States to reach an agreement on the budget of the country, “the clock is ticking and investors get nervous," commented an Economist. " They accelerate their sales dollars , fearing more a closure ( non-essential ) government affects the quality of U.S. assets and hinders growth," the expert added , citing expectations that a partial closure utilities for two weeks would reduce economic growth " 0.3 to 0.5% ." Elected officials must agree to the Congress to ensure continuity of government services on 1 October. A text passed in the Senate Friday is still pressed by the House of Representatives before returning to the Senate for a final vote. You always hope that a last-minute agreement is possible, but this prospect darkens every moment while Congress keeps the dollar and the economy in hostage.

In addition, the market is still uncertain as to when that will choose the Fed to begin to slow its purchases of assets ($ 85 billion per month). It will be based largely on the level of unemployment to make such a decision, which could happen in October or December. Investors therefore waiting for the next monthly report on employment and unemployment situation in the United States, a major indicator to gauge the strength of the recovery in the world's largest economy which is scheduled for publication on October 4. Uncertainties on Friday were reinforced by new interventions leaders and voting members of the Fed, which accentuated the pressure on the dollar. Faced with such remarks, bond rates declined significantly during the session and bringing with them the greenback.

The current Fed policy has the effect of keeping rates low and dilutes the value of the dollar. Traders also scrutinized Italy where resurfaced fears of a new political crisis and trying to take face saving measures. Around 2100 GMT, the British pound rose against the euro at 83.76 pence per euro and climbed against the dollar at 1.6137 dollar per pound. The Swiss franc rose against the euro at 1.2244 Swiss francs to the euro and against the dollar to 0.9052 Swiss francs to the dollar. The ounce of gold finished at $ 1,321.50 at auction Thursday night against 1333 dollars. The Chinese currency finished at 6.1186 Yuan against one dollar for 6.1206 Yuan yesterday.

The Economic Crash and The Future of Dollar

The death of a currency is essentially a political thing. It may be decided in the cold, as in the old currencies of the euro area. It can also - and often does - disappear because the company no longer operates legally. While it may be pessimistic about the future of the United States, but only Cassandra argue that this country is on the verge of collapse. So the dollar will survive even as the U.S. economy recovers, the federal government has ever borrowed so cheap and instead of inflation, deflation is more threatening, thereby increasing Americans even more attractive for their money. Certainly, the greenback could get by in his corner, but losing its prerogatives international. However not forget that more than a store of value is the motto franca of global trade, one in which most prices are rank, and transactions are settled. Neither the renminbi still inconvertible nor faltering euro area can play this role today and even tomorrow. This will be a fortiori not the case of a basket type SDR, an instrument that can be used for transactions, no one ever knowing which component of the basket used. As proof, the ECU was not only becoming euro currency. All proposals to reform the international monetary system based on such a cart so that saliva are lost. Unless of course, like the European Monetary Union, we created a world central bank issuing, say, bancors, as Keynes had proposed at Bretton Woods in 1944, an idea that nobody is going to seriously defend after disappointments that one size fits all policy of the ECB has brought.