Turning point for the dollar?

The dollar has been falling hard on the world's foreign exchanges for some time. But that could be about to change - and investors should be sure to position themselves accordingly.

We take the view that inflation is a lagging indicator and deflationary pressure, the consequence of deflating asset prices, is the more pernicious issue for the future.

In that context and given that the US Federal Reserve is clearly more concerned about the growth outlook and propping up an ailing Wall St. we were surprised that the accompanying statement to the Fed's latest base rate reduction (Fed Funds rate down to 2.25%, Discount rate down to 2.5% on 18th March) was so hawkish, much more so in fact than the late January communiqu which seemed to play down inflationary pressure.

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