Concerns over a trade war weakened the dollar this week to historic lows at a time when foreign capital -- the dollars other countries use to buy US assets such as stocks and government bonds -- dropped to $10 billion in October from $40 billion the previous month. While economists cautioned that a one-month decline might be an isolated one, they said a second straight tumble could hasten the devaluation of the dollar. This week the dollar reached its lowest level against the Japanese yen in three years and its lowest point ever -- $1.19 -- against the euro in New York yesterday, down from $1.18 the previous day. The Swiss franc is trading near the six-year high against the dollar it reached in May, and economists say the currency has replaced the dollar as the preferred refuge in turbulent times.
The dollar is going to devalue. We have these huge deficits, and we need $500 billion a year" in foreign investments "just to keep things going."
