Dollar Hits A New Low
This week the US Dollar sank to 25 year lows against the Pound, AU/NZ Dollars and other currencies. There’s a saying that money flows to where its treated best.
What does that mean? It means people are converting their money into currencies with the highest yields.
Yields on the AUD,NZD and South African Rand are quite a bit higher than here in the US. Their economies also seem to be growing faster than the US’ too. SA Central bank Governor Tito Mboweni said last week that interest rates were ‘too low’. The South African Reserve bank raised the benchmark lending rate by 50 basis points on June 7th and may raise them again on Aug. 16. Not surprizingly, the South African Rand is sitting at a six week high.
I don’t know if its already too late to the party, but buying foreign currency ETFs or stocks with foreign exposure might not be a bad idea. I’ve done very well with Anglo Amercian (AAUK) and BHP Billinton (BHP).
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July 6th, 2007 at 3:33 am
I wouldn’t be so upset about the dollar dropping a little bit. There is at least one positive side: American products are cheaper and more competative. And that’s not too bad!
July 6th, 2007 at 9:03 am
excellent points.
i’ve set myself up to profit from a declining dollar by buying gold, commodity stocks and canadian income funds.
who’s upset? I’m rejoicing
ok, not really. foreign travel is getting very expensive