The dollar has weakened against major currencies, tumbling to the 115 range against the yen, while the euro has regained parity with the U.S. currency for the first time in two years and five months.
At first glance, the dollar fall appears to have been caused by the U.S. stock market slump. More fundamentally, widespread anxiety toward corporate America has highlighted the risk of investing in dollar assets and their reduced profitability. It's now safe to say the dollar will enter a major adjustment phase from its late 1990s strength.
Federal Reserve Chairman Alan Greenspan, in Senate testimony July 16, warned against easy dollar-fall forecasts. But the remark itself suggests many investors believe the unit is headed down.