WSJ: Euro Suffers On Greek Woes; Dollar Gains More Safe-Haven Luster

[Poll_Blind]

From Wall Street Journal:

NEW YORK (Dow Jones)--As talk of a Greek default intensified and political chaos in the country escalated Thursday, the euro continued to weaken.

For the first time in three weeks, the euro fell below $1.41. The decline followed a 1.8% decline against the U.S. dollar Tuesday, when Greek default fears accelerated and euro-zone contagion concerns were renewed.

--snip--

Barclays expects an orderly restructuring to occur in 2012. "Passage of Greece's medium-term fiscal strategy is crucial for euro prospects," Yates added. "If this doesn't occur, it is hard to imagine the euro not depreciating quickly, with the dollar and Swiss franc benefiting".

Despite what some view as fragile and even eroding fundamentals in the U.S., the dollar still remains the world's largest safe-haven currency of choice.

--snip--

"The fear factor is clearly supporting the dollar," Rosenstreich added." If judged solely by its concerning underlying fundamentals and weak long-term prospects, the dollar should be heading in the opposite direction."

I've been thinking about this quite a bit lately but haven't posted because it's mostly ephemeral. But it's basically the concept that if the world were a more stable place, the Dollar would be in the shithouse. This chaos in Greece hurts the euro and does appear to have been sending folks to the dollar for investment purposes. And the Swiss franc but I'm not so sure that's much serious competition. Anyway, for the time being, this could be good news for those of use who use dollars. But the situation is never far away from a grim turn because we have so much debt out to creditors.

PB

[robcon]

1. I guess compared to the Euro, the dollar isn't so bad.

n/t

[aquart]

2. The rich don't see any relationship between their policies and this instability.

And the general refusal to accept and allocate resources for climate change is going to make the instability almost permanent.