Why is the dollar falling on Greek bailout news? Last I checked, that involves a massive shift of funds over to the country, much of which is coming from the IMF and is therefore a devaluation.
The U.S. dollar, for the meantime, is a static currency, so long as the Fed maintains a zero sum policy game with the bonds in its portfolio, and Congress refrains from borrowing more.
Who believes that bailing out Greece is going to be a strengthening act for the euro? It feels more like a move that will weaken the currency, despite Greek austerity.
My guess is the dollar is weakening more out of habit and reflex to the bailout, than for any good reason.
But again, the real issues everyone should be focusing on are the U.S. debt talks, and the state of affairs in China. Get your heads out of the Mediterannean.
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