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Will a Weaker Dollar Hurt Stocks?
The dollar is heading for its worst month this decade after Fed Chairman Janet Yellen reiterated that the Fed will move cautiously in raising interest rates. For the investors the question is, will a weaker dollar hurt stocks or help? Bloomberg Business writes about Yellen sending the dollar to its worst month since 2010.
The dollar headed for its worst month in 5 1/2 years after Federal Reserve Chair Janet Yellen doused speculation the U.S. central bank will pick up the pace of interest-rate increases. The yen strengthened.
A gauge of the greenback approached the lowest since June after Yellen said the Fed will act “cautiously” as it looks to raise rates against the backdrop of a deteriorating global economy. The dollar has fallen against all of its 31 major peers in March with Russia’s ruble and Brazil’s real posting the biggest gains, helping emerging-market currencies to their best month in 18 years.
The Fed sees itself as walking a narrow line with inflation on one side and recession on the other. Although the US economy is moving along the global picture is bleak, especially in emerging markets and China. Thus the Fed will proceed slowly in raising rates and the dollar will weaken a bit. Will a weaker dollar hurt stocks or help them?
Stocks Higher on News of Cautious Approach to Higher Rates
The stock market’s first response to Yellen’s speech was to go up. Reuters reports that Wall Street is higher on the news of a cautious approach to higher rates.
4. http://profitableinvestingtips.com/profitable-investing-tips/will-a-weaker-dollar-hurt-stocks
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