Global Markets: Trade Row Slams Dollar

[Spazito]

LONDON (Reuters) - Fears that Washington may be ready to use trade barriers to support the U.S. economy and jobs roiled markets on Wednesday, sending the dollar to a record low against the euro and depressing shares.

<snip>

Market confidence in U.S. assets took another hit from news late Tuesday that foreigners had steeply pared their buying of U.S. Treasury bonds and sold U.S. stocks in September.


The specter of protectionism has led many traders to think that President Bush (news - web sites) is so desperate to protect domestic industries before presidential elections next year that his government may pursue a weaker dollar in the future, which would make global investors shy away from U.S. assets.

<snip>

Brown said that fallout from the U.S. trade barriers could make it difficult for the U.S. to fund its "twin" deficits if investors shift away from buying U.S. Treasuries due to fears of a slumping dollar.

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http://story.news.yahoo.com/news?tmpl=story&cid=568&e=15&u=/nm/markets_global_dc

[Fovea]

1. I so freakin hate

being right about this.

Bush does not care, we will be in a command economy in 05, and he doesnt need to be elected in 04, he would be just fine with seizing power.

[Art_from_Ark]

2. To a foreigner watching the dollar sliding against his/her currency,

there isn't much incentive to buy US Treasuries, even if the interest is 4%.

Dollar vs. yen-- down 8% in two months. Down 20% in little more than one year.

[Art_from_Ark]

3. (deleted by author-- same as #2)