Forex View: As Dollar Drops to Low, Is an Intervention Likely?
It's sink-or-swim time for the U.S. dollar against the euro.</br></br>After sharp and steady declines that culminated in an all-time low for the dollar Friday, concerns are mounting that the currency may be at risk of a precipitous fall.</br></br>The euro reached as high as $1.5465 Friday, nearly 10 U.S. cents higher than where it was just 30 days ago. Driving the move is a swarm of dollar-negative news that includes a likely U.S. recession, a worsening housing crunch, shrinking liquidity in credit markets and likely Federal Reserve interest-rate cuts.</br></br>Markets are even buzzing about the possibility of intervention, in which the Fed or another central bank would step in to buy dollars. The Fed hasn't intervened to boost a sagging dollar since 1995. Analysts continue to say intervention is unlikely, although they no longer ruling it out.</br></br>But Federal Reserve Chairman Ben Bernanke, for one, doesn't appear to be sweating too much over the dollar.