|
"What appears to be holding the market back are more intangible concerns, including fears of another terrorist attack, distrust of corporate executives and worries about the accountants who have been reviewing their books."
"Now add to that list of fears a potential plunge in the value of the dollar."
"Since its high for the year at the end of January, the dollar has fallen 9.4 percent against the euro. The dollar is down 7 percent against the Japanese yen since its 2002 high in early February. So far, the decline has been orderly."
"But Stephen S. Roach, chief economist at Morgan Stanley, says the chance of a dollar plunge has grown recently — to a 15 percent probability from 5 percent. While the odds are low, the impact should be considered."
"The dollar, by Morgan Stanley's calculation, is overvalued by 14 percent. It is also threatened by the United States' large current account deficit, including international trade. Covering this deficit requires a rising inflow of foreign capital. This means a slowdown in foreign capital inflow would weaken the dollar."
"The return of federal budget deficits in the United States and hints of protectionism, especially tariffs on foreign steel imports, 'hardly instill confidence in the dollar as the mainstay of global commerce,' Mr. Roach wrote in his recent report."
8:52:56 AM Google It! 
|
