In the land of the blind, the one-eyed man is king. So it goes for the dollar -- the U.S. economy is experiencing a large-scale slowdown, equities continue to sell like hotcakes, but still, the dollar has gained status as a safe haven as investors struggle to find somewhere to put their money.

Weakened economies across the globe continue to result in large-scale declines in equity markets, as yesterday the

Dow Jones Industrial Average hit new two-year lows in the U.S., and European stocks fell to 17-month lows. Despite a strong rally in the Japanese

Nikkei

stock index on Wednesday, the Japanese equity markets fell sharply again today. The woes in the three largest economies -- the U.S., Japan and the euro zone, continue to spread across borders to second-tier economies, creating a need for a refuge.

The dollar has recently risen to this status, and as a result, risen in value against most other major world currencies.

But why the dollar as a one-eyed king? Because, despite domestic investors' unhappiness with Sir

Greenspan's half-point rate cut on Tuesday, his efforts to stimulate the economy are a more concerted effort than has been seen anywhere else.

On Monday, the

Bank of Japan

announced a radical monetary policy shift to attempt to boost its own struggling economy -- a move viewed as a good start, but largely overdue. And in Europe, as the

European Central Bank

convenes next week, most investors predict that there will be no interest rate policy shift to help invigorate the euro zone.

While the euro zone has been largely trailing in the race downhill among major economies, data continues to show daily that it is catching up quickly. France lowered its growth target earlier today, and a weak German

Ifo

business climate survey yesterday has only added fuel to the fire.

And so, while in theory the dollar should be falling sharply to the euro as current fundamentals mimic those that have caused devaluations in the past, instead it has been rising strongly. Hitting new three-month lows, the euro was trading most recently for $0.8893, down from yesterday's close of $0.8958.

The break below 89 cents signaled another significant technical barrier, and investors will look next toward the $0.88 to $0.8850 range. Should the dollar break through this, traders could foresee a euro devaluation heading toward its record lows in the 82 cent range once again, according to

Reuters

.

The dollar continues to strengthen against the yen, as the pace of yen devaluation goes noticeably unchecked by the Japanese government. The dollar was most recently trading for 123.65 yen per dollar, setting new 22-month highs again, and up a bit from 123.37 yen at yesterday's close.

The euro/yen trade remains in a tight range again today, as the euro slips in value against the yen. The euro was most recently trading for 109.99 yen per euro, down from 110.42 at last close.

Australian Treasurer

Peter Costello

made public comments early today to the effect that the large devaluation of the Australian dollar does not reflect the country's current economic fundamentals. His comments were blatantly ignored as the Aussie currency fell further to new all-time lows against the U.S. dollar again today. The Aussie dollar was trading most recently for $0.4911, down from its last close of $0.4941.

The rest of dollar bloc continues to struggle against the U.S. counterpart, as the Canadian buck remains mired near two and a half year lows today. The U.S. dollar, though, was recently trading down slightly in value relative to yesterday's close against the Canadian currency, at C$1.5725. It closed trading yesterday at C$1.5748.

The British pound is down sharply against the dollar today, as it tags along with the euro down the slippery slopes. The pound was trading recently at $1.4200, well down from yesterday's close of $1.4302.

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