QE3 is having its predictable impact on the US dollar. The dollar is now down around a 7-month low. The polar opposite to the US dollar is gold, so investors should be accumulating gold investments in response to this latest slump in the US dollar…
- The dollar hovered near a seven-month low against major currencies on Monday after the Federal Reserve’s announcement of aggressive monetary easing last week dampened the outlook for the U.S. currency.Some near-term recovery could be likely, however, given the dollar’s 3 percent drop so far this month, which may have been too far, too fast. The move pushed the euro to a four-month high against the dollar and the yen to a seven-month high.
The Fed pledged last week to continue buying mortgage bonds until unemployment falls significantly. The aggressive move came a week after the European Central Bank unveiled a new bond-buying program to address the region’s debt crisis.
“The outlook for the dollar has definitely been damaged by the policy actions by both central banks — the Fed and the ECB,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.