The American dollar isn’t nearly as strong as it used to be, according to news that came about this week. Because the United States economy doesn’t look particularly promising at the moment, the dollar fell to a brand new low last week. This news, coupled with the fact that oil prices hit their highest points ever, leaves many economists in the United States with many new worries about the economy.

Among the problems with the US economy are the strangely low earnings from Bank of America, the continually slumping labor market, and the already slumping housing numbers. In addition to that, the Federal Reserve released a report on the economy that was anything but promising.
There has been a ton of pressure added to the credit market in recent weeks, as US banks might be looking at liquidation of their securities in the near future. This news also sparked the increased buying of US Treasury bills, which have long been a safe option for investors. This upswing shows that investors are concerned about the market’s direction and want to play it safe during this time.

Tom di Galoma, a chief executive with Jeffries & Co. had this to say in an interview with Yahoo News. “There are concerns about another rout in the credit market. Housing will be a drag on the economy for the next 12 to 18 months.”
There is also speculation among market veterans that another cut in the federal interest rate is coming either this month or the next. Most felt that the Fed would take action before December.

The government bond market also saw the yield on their three-month Treasury bill slip. The bill dropped 23bp to end up at 3.76%. This marked a three-week low. Other Treasury bonds also saw their stock drop in recent weeks, as the market has taken a hit.
The situation isn’t much better in Europe, where the ten year Bund fell by 4.32%. Over in Asia, the ten year Japanese government bond dropped a remarkable 1.64%, which is just one hundredth of a percentage point above the bond’s month low.
Over in the currency markets, the dollar has also seen a drop. It met a record low when compared to a number of different currencies in the last week. The Euro, on the other hand, made a record high number of $1.43 when compared to the dollar. Speculation has it that potential Fed interest rate cuts have played a role in effecting the situation.

Though there are certainly concerns over what to do about the dollar’s sinking value, all signs point to the federal government staying put at this point. All of the reasons for the dollar’s decline seem to be things that will sort themselves out if they are given the chance. Slumping housing numbers and low rate expectations are contributing factors that should eventually cool down as the value of the dollar increases.
As far as metals go, sterling saw a rise in its value this week. It hit a three-month high against the value of the dollar. This came as a result of above average retail sales data in the United Kingdom, where the economy seems to be heading in the opposite direction.
One of the primary concerns for the US economy comes as a result of the rising costs of US crude oil. With tensions in the Middle East continuing to grow, the price of a barrel of oil rose to nearly $90. This is an all-time high that doesn’t seem likely to come down anytime soon. Platinum and gold also look like they are headed into uncharted, record territory.