Further decline in dollar likely this year

IF there’s one thing that the market hates, it’s uncertainty. In troubled times, investors hold their cash; they place it on deposit, or buy gold and other precious commodities that become more valuable as anxiety grows.

And this is exactly what's happened over the past thee months. As America's resolve to disarm Iraq has grown, the US dollar has fallen, and the price of gold has risen to seven-year highs.

So it might seem reasonable to assume that this pattern will be reversed as soon as the uncertainty that's driving the market is resolved. On this basis, many analysts now expect that the dollar will reverse its recent 10% fall against the euro as soon as war is concluded or averted.