Morgan Stanley Bearish on Euro
Morgan Stanley’s chief strategist Stephen Jen was quoted as saying the euro and developing-market currencies will lose ground to stronger currencies as the market turmoil continues well into 2009.
“It is time to be bearish on the euro and emerging-market currencies again,” Jen wrote in a research note to clients. “The recent signs of tentative improvement in market conditions reflect an alleviation of the ‘liquidity lock’ problem, but say little about the credit crunch problem, which is still ongoing and may last years.” More
Russia Devalues Ruble for Second-Straight Day
As declining oil prices continue to steer Russia towards an economic crisis, Russia’s central bank devalued the ruble for the second day in a row, forcing the ruble to its weakest level against the dollar in almost six years. More
Goldman Sacs Predicts China Will Peg Currency to the Dollar
To help China’s main customers – primarily the U.S. and Europe – deal with weakening domestic currencies, Goldman Sacs predicts that China will “peg” the yuan to the U.S. dollar thereby keeping the yuan within a narrow range. The goal is to prevent widening exchange rates from increasing the cost of China’s products at a time when global demand for China’s products are already in free fall. More
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