The Dollar Swoon

With US rates near zero and with no signals from the US Fed to raise rates in the near future, the dollar has continued to weaken against most of the other currencies. The ICE Futures US dollar index, which measures the greenback against a basket of foreign currencies, has fallen to its lowest level in 15 months.
Investors around the world see the dollar as weaker than other currencies, and so they're using it for what's known as ‘carry trade’, to finance purchases of investments in other countries. (NYT photo)

Record-low interest rates in the US and the resulting slide in the dollar have been major forces behind the recent surge in stocks and other commodities. Wall Street has seen new 2009 highs while gold prices have crossed $1,1100 an ounce.
Gold is seen as a hedge against the weak dollar and inflation, which investors fear could become a problem down the road if the greenback keeps falling. (AP photo)

Japan is Obama’s first stop on an Asian tour that will take him to China and South Korea next week after attending the Asia-Pacific Economic Cooperation Summit in Singapore this weekend.
The US president has been quoted as saying that he plans to raise the issue of the yuan currency with Chinese officials when he meets them. (AP photo)

China has rebounded faster and stronger than other major economies from the world economic crisis, with flowing government spending and bank lending pushing up economic expansion by 8.9 per cent in the third quarter.
US treasury secretary Timothy Geithner welcomed Beijing's commitment to shifting to a ‘more flexible market-oriented exchange rate’ over time. (AP photo)

US Treasury Secretary Timothy Geithner said he believes a strong dollar is good for the US economy and Washington was committed to bringing down its budget deficit. Because of the important role the dollar plays in the global economy, the US recognises that it bears ‘a special responsibility’ for implementing policies that instill confidence in investors around the world, he said.
"As growth recovers and strengthens, we're going to bring our fiscal positions back to a sustainable balance," he said. (NYT photo)