Dollar's Slump Puts Morgan, Goldman on `Intervention Watch' By John Fraher and Simon Kennedy
March 13 (Bloomberg) -- The dollar's record-breaking slide may trigger the first coordinated effort to prop up the currency in 13 years, say strategists at Morgan Stanley and Goldman Sachs Group Inc.
The currency today fell below $1.56 per euro and slumped to the lowest level in 12 years versus the yen. That has prompted complaints from European Central Bank President Jean-Claude Trichet and Japanese Finance Minister Fukushiro Nukaga.
U.S. Treasury Secretary Henry Paulson said today he backs a ``strong dollar'' and refused to elaborate when questioned at a press conference in Washington. The challenge for policy makers is fighting the $3.2 trillion-a-day currency market while the Federal Reserve cuts interest rates and the U.S. economy falters. With traders increasing bets on a weaker dollar, the Group of Seven nations may be compelled to act, some strategists said. ``We're on an intervention watch,'' Stephen Jen, Morgan Stanley's London-based head of foreign-exchange research, said in a telephone interview today.
``While I don't think we have reached the threshold yet, the argument in favor of it is gradually becoming compelling.'' more here:
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