Dollar Takes Another Fall
The dollar continued its slide against the major currencies Thursday after comments from Federal Reserve Chairman Ben Bernanke sparked worries of stagflation.
Euros were selling for $1.4692, up from $1.4635 late Wednesday. British pounds were buying $2.1101, up from $2.1014 at the end of the last session. Dollars were buying 112.59 Japanese yen, down from 112.78 yen previously.
"The Fed is still concerned about headline inflation, but at the same time they think the risks are pointing toward lower growth," says Ron Simpson, managing director of currency analysis at Tampa-based Action Economics.
"It's not too much of a stretch to get from that to stagflation, which generally doesn't help currencies."Stagflation, which last afflicted the U.S. economy in the 1970s, happens when high inflation is combined with low growth. That would be a particularly knotty problem for the Fed, since inflation is best fought with tight monetary policy and high interest rates. But such medicine also tends to slow the economy further. The last bout of stagflation was only beaten by double-digit interest rates back in the early 1980s, which in turn resulted in a recession. Elsewhere in the currency markets, the Canadian dollar would buy $1.0792, up from $1.0774 previously. The Australian dollar was selling for 93 cents vs. 92.9 cents the previous day.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV