Bahamian Dollar casuses worldwide economic slowdown

Bahamian Dollar casuses worldwide economic slowdown

The Dollar has strengthened against a basket of currencies following the announcement from the Federal Reserve that it would not be implementing further Quantitative easing, meanwhile the Indian Rupee hit a new record low against the greenback following the news and the prediction that the US economy will continue to suffer a slow recovery thanks to the ongoing Euro crisis.

After a weak start at 56.40, the rupee dropped 42 paise to hit new low of 56.57 per dollar after it had touched the 56.55 level for the first time, surpassing its previous record low of 56.52 set on May 31. The rupee has lost 75 paise in last three sessions. The reserve bank of India dampened market sentiment after not changing interest rates in its mid-quarterly policy review. As a result of the country’s poor economic situation the credit rating agency Fitch has threatened to cut the country’s outlook to negative.

Figures released from China and the Eurozone show that both regions are showing signs of further economic slowdowns. The Chinese posted their eighth consecutive decrease in industrial output whereas Germany is showing signs that demand for its goods are weakening. The Dollar has taken advantage of the news as investors flock once more to the greenback for a safe haven currency.

Chris Williamson, chief economist at Markit said; “It is a worryingly steep downturn we are seeing and it is spreading from the periphery, which has been falling at an increased rate, through to Germany. It is becoming deeper and more broad-based.”

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