The Greenback No Longer Provides Safe Haven
Chart of the Week for September 21-27, 2001
Historically, the US dollar has been the currency of choice in times of global crisis. However, the US is usually not the victim of the turmoil. Exacerbating an already prevalent trend, last week’s terrorist attacks had a negative effect on the US dollar versus major foreign currencies. Since September 10, the yen and the euro have appreciated by 4% and 3%. respectively. This is both good and bad news for the US. The bad news is that imported goods become more expensive for US consumers. The good news is that this decline provides a boost to corporate earnings of US based multinationals and returns of international investors.
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