Dollar Slides as GM May Announce Bankruptcy

The dollar fell against currencies in Asia in the beginning of this week’s session, as General Motors may file for bankruptcy this Monday.

General Motors Corp. a company which was once the biggest in the world in its sector, is ready to file for bankruptcy, and the fact that the U.S. government will inject money and become its main owner brought the Dollar Index to the lowest level in this year. In Asia, China manufacturing production rose for the third month in a row, strengthening currencies like Taiwan’s dollar and the South Korean won against the U.S. currency. The current wave of optimism made the dollar, regarded as a risk aversion investment, to lose ground against the main currencies since March, and the current condition of American companies like General Motors is putting pressure on the greenback.

Asian economists consider the optimism strong and solid, and the positive reports coming from China are sharpening the equities market rally, which help high-yielding currencies like the Australian dollar and the South Korean won to climb against refuge currencies in Asia like the yen, and globally like the U.S. dollar. The majority of analysts concord that the greenback will continue its downtrend as long as the rally in stocks continue.

EUR/USD traded at 1.4230 from a previous price of 1.4105 while AUD/USD also climbed to 0.8123 from 0.7913. USD/KRW fell to 1252.40 from 1253.13.

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