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With the dollar's fall, intervention
idea gains force
AFP
Monday November 12, 2007
The unrelenting fall of the US dollar has stirred growing talk
of currency intervention, but for now such a move remains improbable,
analysts say.
"The depreciation of the dollar is gaining speed, and what
has so far been an orderly correction in the dollar is at risk
of degenerating into a more violent correction," said Stephen
Jen and Charles St-Arnaud of investment bank Morgan Stanley.
If the dollar continues to weaken, the potential costs to the
Group of Seven rich nations quickly will wipe out any benefits
gained, the analysts wrote in a note to clients.
"It is not too early contemplating the risk of coordinated
interventions by the G7," they said, adding that it may take
several weeks for G7 members to find common ground on the issue.
(Article continues below)
"History shows that multilateral, coordinated interventions
have been key in establishing turning points in multi-year trends
in major currencies in the past three decades," they added.
What could spur the process is the steepness of the dollar's
fall against other major currencies: the greenback lost 5.4 percent
of its value against the euro and 6.8 percent against the yen
in the July-September period.
The decline, driven by the US housing slump and credit woes,
quickened this week after a Chinese official indicated Chinese
foreign-exchange reserves should diversify away from the dollar.
Full
article here.
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INFOWARS:
BECAUSE THERE'S A WAR ON FOR YOUR MIND
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