Dollar Takes Another Pounding

The Guardian notes that the dollar has just fallen to a low against the pound ($2.10) and the euro ($1.47). Driving the proof that, when it comes to expectations, there may be no bottom, is speculation whether China is going to start shifting its foreign reserves out of dollars.

Analysts said today's falls had been sparked by comments made by Cheng Siwei, vice chairman of China's National People's Congress. He told a Beijing conference on Tuesday that China would "favour stronger currencies over weaker ones, and readjust accordingly".


A vice director of China's central bank, Xu Jian, was also quoted as telling the conference that the dollar was "losing its status as the world currency".

Those hoping for lower oil and fuel prices in the US should not keep holding their breath, because relief is a long way off. As my wife, after reviewing some old receipts, said to me last night, "I started longing for the days of $1.89 gas. Then $2.89 gas." And then $3.89 gas.