Not even a mounting debt problem in the United States can keep the
dollar from losing its status as an investors favorite these days.
The dollar exchange traded fund (
) is the world's international reserve currency, offering shelter
from a flailing yen and a fast-sinking euro.
Federal Reserve Chairman Ben Bernanke cautioned today that the
U.S. debt situation cannot continue on as it has been.
P. Parameswaran for Brisbane News reports that
not even that problem can put a dent in the growing popularity of
the U.S. dollar these days. The greenback has surged to
four-year highs against the euro while foreign investors jostle to
buy even more American debt. [
Hedge Euro Currency Risk with ETFs.
But not everyone is rejoicing over the dollar's newfound
Scott Morrison for
The Wall Street Journal
the stronger dollar and slumping euro could lead to a consumer
spending slump in Europe and lower revenues for internet companies
doing business overseas.
Companies that did well with a weaker U.S. dollar - for
instance, Google (NASDAQ:
), eBay (NASDAQ:
) and Amazon (NASDAQ:
) - are now threatened by the sharp rise seen against the euro. A
stronger dollar means companies get less for their euros when they
repatriate overseas revenue.
The dollar has strengthened about 16% versus the euro this year,
reaching a rate of 1.1962 euros per dollar on Friday as concerns
about euro-zone debt mounted, says Morrison. [
Can the U.S. Dollar Be a Safe Haven?
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PowerShares DB U.S. Dollar Index Bullish (NYSEArca:
Tisha Guerrero contributed to this article.