As Gold Falls, The Dollar Roars Back

With gold futures now well below $1800, are investors fleeing back to the dollar?

EUR/USD hasn’t fallen quite as significantly as gold — and is still up from earlier this month — but this may mark a return of confidence to American paper. Or it could just mean a lack of other alternatives.

The dollar has been slowly losing value against the euro all month, as investors contemplate the prospect of QE3. Expectations of a cheaper dollar have provided optimism to investors all year as the crisis in Europe deepens.

The dollar has risen enough in an hour to erase overnight losses on the euro.

 

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