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Wednesday, August 19, 2009

Pimco Says (US) Dollar to Weaken as Reserve Status Erodes

Pimco Says Dollar to Weaken as Reserve Status Erodes (Update4)
By Garfield Reynolds and Wes Goodman

Aug. 19 (Bloomberg) -- Pacific Investment Management Co., the world’s biggest manager of bond funds, said the dollar will weaken as the U.S. pumps “massive” amounts of money into the economy.
The dollar will drop the most against emerging-market counterparts, Curtis A. Mewbourne, a Pimco portfolio manager, wrote in a report on the company’s Web site. The greenback is losing its status as the world’s reserve currency, he said.

“Investors should consider whether it makes sense to take advantage of any periods of U.S. dollar strength to diversify their currency exposure,” Mewbourne wrote in his August Emerging Markets Watch report. “The massive amounts of U.S. dollar liquidity produced in response to the crisis” have helped reduce demand for the currency, he wrote.


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