Monday, June 15, 2009

No Alternative for Dollar Yet

German magazine Der Spiegel and a Telegraph newspaper report that during Asian hours the German Chambers of Industry and Commerce predict financial problems that are deepening in Germany, Europe's leading economy. It was a sign that despite positive trends in the world economy there are some problem ahead and recovery does not coming soon. According to the report euro is to fall to Y137.22 as of 0450 GMT, down from Y137.75. And against the USD, it was at $1.3946, down from Y1.3995 last week. Hiroshi Maeba, a dealer at Nomura Securities, says that players become bearish on the euro and they try to shift this position from U.S. economic bases to European economic bases to encourage foreign exchange trading.

At the same time the yen strengthened its position against the dollar. This fact is reasoned by the statements made by BRIC nation representatives about their disappointment with the fact that the dollar remains the world major reserve currency. Analysing the current currency market situation Alexei Kudrin, Russian Finance Minister expressed the idea that it is too early to review the alternative to the US dollar. However, some traders in Tokyo admit the possibility that these countries will try tolook for an alternative to replace the greenback.

Some traders said that during Asian hours on Monday, Japanese importers` buying supported the U.S. currency. At this point the yen the U.S. dollar rise against the New Zealand dollar and the U.S. dollar on speculation New Zealand government might step up its rhetoric against strong kiwi on suggesting that this would damage the country's economy.

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