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Investors flee the dollar


HB FRANKFURT. The dollar index, which reflects the price movements of six major currencies, fell to its lowest level in about a year. To the existing facility as a safe harbor Swiss currency, the dollar fell to a record low of 0.9466 francs. The Japanese currency, it stood at 81.07 yen on a new 15-1/2-Jahres-Tief. The Australian dollar reached for the first time since the early 80’s almost parity to its U.S. counterpart. In parallel, the euro jumped over the mark of 1.41 dollars and was therefore not as expensive as for almost nine months.

One of the main reasons for the dollar’s weakness is the uncertainty about the shape of the "quantitative easing (QE) 2.0", stressed the analysts Commerzbank in a market comment. A clear strategy can be seen at present. "It creates the impression of a rather perplexed and panicked Fed, as the establishment of trust in its monetary policy." Against this background, the market await with interest on a speech by U.S. Federal Reserve Chairman Ben Bernanke on Friday, wrote the foreign experts of Metzler. "His remarks on the" objectives and instruments of monetary policy in an environment of low inflation ‘to bridge the time until the actual Fed interest rate decisions 3 November of the utmost importance. "They could have more clarity on policy options and schedule in terms of" creating QE 2.0.

The trigger for the current slump in the dollar market observers mentioned the surprising expansion of the trading range for the exchange rate for the Singapore dollar. "This increases the likelihood of further appreciation of Asian currencies, including the Chinese, in advance of the G20 meeting," foreign expert said Hideaki Inoue of Mitsubishi Trust Bank. The finance ministers of the 20 largest industrial and emerging countries want to be composed in late October, followed by a summit meeting in early November. The U.S. currency fell in reaction to expanded trading range on Thursday to a record low of 1.2896 Singapore dollars.

Inflation fears drove investors in equities and other asset classes, said financial market expert Tsutomu Soma of Okasan Securities. The Dax climbed to a 25-month high and the MSCI index of world’s major stock market value reached almost the same level immediately prior to the bankruptcy of U.S. investment bank Lehman Brothers in September 2008.

Many investors also coated their money into commodities. These are mostly traded in dollars and made cheaper by a devaluation of U.S. currency for investors outside of the United States. Gold continued its record-hunting and increased in price up to $ 1,387.10 per troy ounce (31.1 grams). Silver reached $ 24.90 a new 30-year high. A ton of copper cost of $ 8,490 is not as much as since July 2008. The oil price also picked up. The landmark U.S. WTI increased by up to 1.3 percent, to $ 84.12 per barrel (159 liters).