THE US DOLLAR: BEFORE AND AFTER THE CRISIS

The US Dollar: Before and After the Crisis

The US dollar has regained all of the losses incurred against the Swiss Franc after September 11. After having lost as much as 5%, it is now nearly unchanged from that day. The charts show, what the US currency did (in percentage terms) 40 days before Sep 11, 20 days before, 10 days and so on. Then, it illustrates what the dollar did the days following the September 11 attacks.

So to illustrate, the chart below shows that the dollar was virtually unchanged 20 days before Sep 11 (-20), compared to the price on Sep 11. But 10 business days after September 11, the dollar lost as much as 5% against the Swiss franc.

SOURCE: FOREXNEWS.COM

But the 3 charts below show that US dollar has more than regained the post September 11 losses it incurred against the euro, yen and pound sterling, and is now above those levels. This suggests that these currencies have poor roles as safe haven currencies vs the dollar, and it's only the Swiss franc that is able to effectively command that role.

SOURCE: FOREXNEWS.COM

On Oct. 22, the yen hit a 10-week low vs the dollar at 122.58, lifting the dollar as high as 2% against the yen from Sep 11.

SOURCE: FOREXNEWS.COM

Pound Sterling is the worst performer against the dollar. It is down nearly 3% against the dollar from Sep 11.

SOURCE: FOREXNEWS.COM

On Oct 22, the dollar Index (trade-weighted average index) soared to 115.98, its highest level since September 4 when it hit 116.03. The highest level before that was in early August when it stood above 117.

NOTE: The 15-year high stands at 121, seen on July 6.

The euro could well find the 87-88 cent level as European think tanks downgrade Euroland's growth forecasts while the ECB continues to fall behind the curve in stimulating growth. The Dollar Index could soon hit 117, which could translate to 87-88 cents in the EUR/USD exchange rate and 123-124 in the USD/JPY exchange rate.