Risky Business: Dollar Losing Status As Reserve Currency
Thomson IM News reports: Negative sentiment toward the US dollar, both expressed and implied, intensified over the weekend, as the greenback's weakness emboldened some finance ministers and leaders of oil cartel countries to speak out against the buck. The negative tone called into question the dollar's ability to retain its status as a reserve currency. Venezuela's Communist leader Hugo Chavez and Iran's Mahmoud Ahmadinejad, speaking at the Organization of Petroleum Exporting Countries (OPEC) summit in Riyadh, said they no longer want be paid in U.S. dollars for their petroleum, but in euros. The outspoken US political adversaries said the weak U.S. dollar is cutting their potential revenue. Ahmadinejad said countries are getting his oil, and in return he receives 'a worthless piece of paper.' In addition, Saudi Arabia's foreign minister Prince Saud al-Faisal's own worries about dollar weakness were exposed, when he commented Friday that the U.S. dollar could collapse if OPEC mentioned dollar weakness in its closing comments. Al-Faisal's comments, intended to be confidential, were leaked to the press. No agreement was reached, and officials decided to meet before the Dec. 5 meeting to discuss the effect of a weaker US dollar on their earnings. The dollar comments at the OPEC meeting upstaged talk of oil production increases, and some currency analysts cited the negative weekend reports as yet another reason to sell the greenback.