Forex rebates on every trade - win or lose!

+ 8 is better than -8. Well done.

1.4510 exotic option expires tomorrow
September 3, 2008

Should EUR/USD backup toward 1.4510, there may be some selling related to a digital option which expires at that level at 10 am tomorrow morning. The owner of the option wants spot to trade below 1.4510 at expiry (and will recieve a $5 mln payout if it does, while the writer of the option will try and push the market higher (if it is close) to avoid the big payoutEUR/USD trades now near 1.4465 after rallying toward 1.4490 after stops were tripped above 1.4470.

does anyone actually trade on odl?

Sources report talk that two names have been good buyers of cable this morning (HSBC possibly China related and Goldmans possibly tied to Quatars possible purchase of Sainsburys.)

NEW YORK (Dow Jones)--The euro struck a 12-month low Wednesday against the dollar, despite another sign of distress in U.S. financial markets.

The move is the latest indication of a total market repositioning, as the dollar reverses losses against previously high-flying rivals and traders prepare for quarter end in a risk-averse environment.

The upshot is a more resilient buck in the face of disconcerting U.S. news, as it benefits from safe-haven flows and concern about the euro-zone economy.

One-month volatility for the euro versus dollar is at its highest levels since September 2001, say traders.

"From November 2000 to December 2001, we saw 10% to 15% swings in the euro versus dollar, which is similar to what we are seeing now," said Kathy Lien, director of currency research at Global Forex Trading in New York.

During that period, the euro was at its historically weakest levels against the dollar since the introduction of the single currency at the beginning of 1999.


The Theory Of Relativity

Troubled U.S. bank Lehman Brothers (LEH) released worse-than-expected preliminary third-quarter earnings early Wednesday. While many have compared the bank's situation to the events leading up to the collapse of Bear Stearns, it's unlikely that the euro will again be catapulted to another record high. The last euro record was struck July 15 at $1.6040.

To be sure, the greenback experienced a slight sell-off on the Lehman report, but short-term trades do not a trend forsake.

"We'd expect the dollar to sell off far more on this type of negative news," said Michael Woolfolk, senior currency strategist at Bank of New York Mellon.

"What this means is the turmoil we're currently seeing in U.S. financials is pushing investors to the sidelines and many international investors to the dollar," as a safe-haven asset, he said.

The dollar's revival is occurring across the board, versus the U.K. pound, commodity-linked currencies and emerging markets. It was stoked over the last few weeks as economic forecasts and remarks from leaders affirmed what the market has long been guessing. The U.S. crisis over the last year is leading to a global slowdown and possible recession in the euro zone.

The European Union Wednesday slashed its economic growth forecast for 2008, one week after the European Central Bank did the same. The E.U. said several major European economies will slip into recession, including Germany, the U.K. and Spain. Overnight, Luxembourg Finance Minister and Prime Minister Jean-Claude Juncker also said there was a risk for "technical recession" in the euro zone.

With oil prices remaining soft Wednesday, traders are finding little reason to hold onto the euro - and other investors are paying attention.

"A lot of people that haven't been involved in foreign exchange may be looking at this move and asking themselves if this is the big turn. 'Are we positioned for that?'... That's exacerbating the degree of dollar strength," said Adam Boyton, currency strategist at Deutsche Bank in New York.

As it is often said on Wall Street: "The trend is your friend."

Some retail traders and hedge funds had bet that higher-yielding currencies such as the euro, U.K. pound and Australian dollar would correct higher from recent declines. However, these speculative investors began aggressively bailing on their dollar-bearish holdings last week. Besides the U.S. currencies, traders are also buying back the less risky, lower-yielding yen.

Late Tuesday, the Australian dollar dipped below the psychologically significant level of $0.80. Elsewhere, the Indian rupee Wednesday slumped to a near two-year low and the Brazilian real has tumbled nearly 10% so far in September.

With the dollar at these elevated levels, Kathy Lien of GFT said its ascent will probably begin to slow.

Nevertheless, the market will likely keep testing the euro level of $1.4000, a break of which could tailspin into a short-lived fall to $1.3900, she said.

Wednesday afternoon in New York, the euro was at $1.4059, down from $1.4104 late Tuesday. The dollar was at Y107.75, up from Y107.15, according to EBS. The euro was at Y151.45, up from Y151.08. The U.K. pound was at $1.7581, down from $1.7586, and the dollar was at CHF1.1339, up from CHF1.1294.


(Riva Froymovich reports on the foreign exchange market for Dow Jones Newswires in New York. The writer can be reached at 201-938-5063 or by e-mail: riva.froymovich@dowjones.com)

NEW YORK (Dow Jones)--The dollar fell against the euro Friday by the most since it began a strong rally two months ago, as a weak U.S. retail sales report reignited fears the Federal Reserve may have to cut interest rates again.

Retail sales fell 0.3% in August, the second consecutive monthly decline, and below economists' expectations for a 0.2% increase. Sales were brought down by falling gasoline prices and the sluggish spending of timid consumers.

Also leading the dollar lower Friday was rampant speculation that U.S. investment bank Lehman Brothers (LEH) might find a suitor this weekend that would allow it to stay in business. Shares in the company, which has been hurt by the housing crisis and credit crunch, have been getting pummeled in recent days, and that helped the dollar as worried U.S. investors dumped riskier assets overseas and repatriated into greenbacks.

The euro climbed to as high as $1.4223 Friday afternoon, well above its one-year low of $1.3882 reached Thursday. Still, the dollar remains much stronger from July 15, when the euro hit a record high of $1.6040.

"The first leg of the dollar's recovery appears to be ending," said Marc Chandler, global head of foreign exchange at Brown Brothers Harriman. "The dollar's rally appears vulnerable to a shift in the pendulum of market expectations about Fed policy."

Late afternoon Friday in New York, the euro was at $1.4219 from $1.3942 late Thursday. The dollar was at Y107.82 from Y106.88, according to EBS. The euro was at Y153.30 from Y149.15. The U.K. pound was at $1.7951 from $1.7517, and the dollar was at 1.1311 Swiss francs from CHF1.1408.

In recent days, markets had all but written off the odds of any more 2008 interest-rate cuts by the Fed, on the assumption that the current benchmark rate of 2% was likely low enough to stimulate borrowing and feed a slow economic recovery.

But U.S. stock markets have struggled this week amid worries over the credit crunch, which is keeping borrowing costs high despite the Fed's rather low benchmark rate.

Rate futures contracts are pricing in firm expectations that the Fed could cut its key rate to 1.75% before year's end and perhaps as early as the Fed's October meeting. The Fed also meets Tuesday, but economists agree that the bank is unlikely to tinker with rates at that meeting.

Surprisingly, the dollar's declines Friday came on a day in which crude-oil prices fell under $100 a barrel for the first time since April. In recent months, the dollar has been supported by lower oil prices, which are seen as helping the U.S. economy recover faster.

As the dollar fell Friday, some of the currencies that have been suffering the most in recent weeks by the greenback's rally rebounded impressively.

The U.K. pound on Thursday had hit a two-and-a-half year low of $1.7449, but rose more than a nickel Friday, hitting an intraday high of $1.7953.

The hopes for a resolution to Lehman's problems also helped boost overall risk appetite, which drove the low-yielding Japanese yen lower as investors began betting again on higher-yielding currencies.

The Australian dollar, for example, jumped to $0.8220, up from $0.8045 late Thursday in New York. The Brazilian real and the Colombian peso also managed to recover from some of their steep losses in recent days.


-By Dan Molinski, Dow Jones Newswires

NEW YORK (Dow Jones)--The massive market repositioning that sent safe-haven flows to the dollar has been exhausted, leaving the buck vulnerable next week to losses against the euro after a month of remarkable advances.

The U.S. currency's gains to a one-year plateau from a lifetime low less than two months earlier are likely to begin subsiding. The U.S. economy hasn't yet reached a bottom and dollar support from the liquidation of riskier positions is diminishing.

"(The) liquidation process is expected to have run its course and more fundamentally-driven levels for major currencies are likely to develop," said Robert Sinche, head of global currency strategy at Bank of America in New York.

"That environment appears likely to support the euro, particularly versus the dollar and U.K. pound," he said.

What will remain a constant in the weeks ahead is volatility, say analysts, as developments unfold in the government's most sweeping foray into financial markets since the 1930s. Currencies changed course rapidly and many times a day this week, although generally remaining in well-established ranges. Thin market conditions most likely exaggerated some of the intraday movements, said analysts.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke are scheduled to testify on Capitol Hill at the start of the week, which could provide fuel for further hectic trading.

Next week, the euro is seen trading between $1.42 and $1.47. The dollar is expected to gain support against the yen from the government package and trade between Y106 and Y109.

Friday afternoon in New York, the euro was at $1.4421 from $1.4348 late Thursday. The dollar was at Y107.14 from Y105.40, according to EBS. The euro was at Y154.55 from Y151.31. The U.K. pound was at $1.8369 from $1.8201, and the dollar was at CHF1.1084 from CHF1.1041 Thursday.

Traders previously put greater faith in the dollar versus the euro on forecasts that the U.S. would bounce back to economic growth before the rest of the world as the U.S.-bred financial crisis extended to Europe. But after a chaotic week of bank closures, buy-outs, dramatic stock losses and a major money market intervention, the U.S. economy is now seen as further from the finish line than expected.

The dollar will suffer on the new Treasury Department and Federal Reserve actions, which indirectly encourage investors to ditch the dollar for riskier, higher-yielding assets on improved risk appetite, according to analysts.

Then, when U.S. financial markets turn dour after the good news wears off - and it is just a matter of time before it does, say analysts - investors will be unwilling to return to the greenback.

"The euro is caught at the moment between the dollar being a safe haven or not," said Bilal Hafeez, head of foreign exchange strategy at Deutsche Bank in London.

The change in market flows recently seem to point to the latter.

"(The) greenback remains on the defensive as the U.S.-centric credit and liquidity crisis appears to have caught up with it. Not surprisingly...indicators show strong net buying of most other G-10 currencies," said Samarjit Shankar, director of global strategy at The Bank of New York Mellon in Boston.

At the same time, the recovery in crude oil prices is providing additional support for the euro, as well as for the Canadian dollar and Norwegian krona. The surge in gold is also aiding the Australian dollar and euro, Shankar added.

The expected dollar weakness on disconcerting market news is also due to rising calls for another cut to the fed funds target rate - avoided by the Federal Open Markets Committee this past week in spite of the bankruptcy declaration by Lehman Brothers. Lower rates make the buck less attractive than higher-yielding rivals, particularly if recession becomes a reality. The American Bankers Association's committee of chief economists at major banks said this week that many members believe the chances for a U.S. recession have grown in just a matter of weeks.

Still, euro gains will likely be limited in the near term, say analysts. Euro-zone data expected next week on the manufacturing sector and a German business climate survey will likely be negative, pointing to impending recession there as well.

"The euro is caught at the moment between the dollar being a safe haven or not," said Bilal Hafeez, head of foreign exchange strategy at Deutsche Bank in London.

Er, right.

And someone has to write this stuff :S

NEW YORK (Dow Jones)-- The Treasury Department's effort to solve the U.S. financial crisis is stymieing the U.S. dollar's attempt at a rebound.

Treasury's $700 billion proposal will extend the U.S. deficit and belabor already weak growth prospects, contributing directly to a weaker exchange rate for the dollar in the medium term, currency analysts said.

The euro rose sharply Monday to an intraday peak of $1.4867, its highest level in four weeks. It's also the biggest single-day gain for the euro since its introduction at the beginning of 1999. Many currency strategists now see the euro as high as $1.50 by the end of 2008.

Shorter-term factors were at play as well Monday, including a $25-dollar rally in crude oil.

The dollar also sold off against the U.K. pound, Australian dollar, Canadian dollar and Swiss franc - a sign risk appetite is up, after global financial leaders said Monday they are ready to act to ensure the stability of the international financial system.

However, analysts said it's the Treasury's plan that is reversing the prospects for a dollar recovery in 2008 after more than a year of considerable declines.

"The massive size of this bailout bill has really scared dollar bulls and revived dollar bears," said Peter Rosenstreich, chief market analyst at Advanced Currency Markets in Geneva.

Monday afternoon in New York, the euro was at $1.4832, up sharply from $1.4480 late Friday.

The dollar had been benefitting over the last month from the safe-haven buying of U.S. assets on fears of a severe global slowdown stemming from the U.S. credit crunch. A decline in commodity prices also helped the buck. The euro fell to a one-year low of $1.3882 on Sept. 11 from a record high last July of $1.6040.

The growth outlook outside the U.S. appeared weaker than inside, especially after the Federal Reserve's aggressive easing policy over the last year to manage the credit crisis, in contrast to the European Central Bank's hawkish stance. Analysts say a recession looks inevitable in the euro zone.

But Treasury Secretary Henry Paulson's plan, still under discussion in Congress, has totally altered that outlook. The cost to the U.S. economy will hamper any chance for meaningful growth or recovery, analysts said.

"The total cost is probably going to be quite large, and it's going to lead to a deterioration of the U.S. position relative to other economies," said Adarsh Sinha, foreign exchange analyst at Barclays Capital in London.

"That position is a medium-term driver for exchange rates," said Sinha, who forecasts the euro at $1.50 within a month.


Dollar Traders At War

The dollar's fall Monday was slow to start against the euro on this changed outlook. Short-term traders saw the Treasury's plan as an aggressive answer to U.S. woes. But, longer-term players came into the market, saw the writing on the wall, and pushed the dollar down.

International investors are fearful, said Benedikt Germanier, currency strategist at UBS in Stamford, Conn. They are asking whether the Treasury and Fed are pumping so much money into the system that they will devalue the dollar.

A $700 billion check is about 5% of the country's gross domestic product, analysts repeated throughout the day.

That amount does not even include supplementary measures - another $200 billion issued to the Fed last week or the commitment to Fannie Mae (FNM) and Freddie Mac (FRE).

At the same time, analysts say that volatility in the market may be a product of lower-than-usual liquidity levels.

"Liquidity is definitely not as high as historically we've seen in foreign exchange," said Rosenstreich.

Investors are asking about their counterparty risks, and many institutions and hedge funds "are pulling back and letting these markets trade themselves."


The Fundamentals Back In The Picture

When the dollar was rallying this month, analysts said a euro below $1.40 did not reflect the fundamental economic picture. The euro zone's strength is fading, but the U.S. economy certainly isn't a beacon, they said.

The euro's rebound Monday, then, may be a bit of catch-up.

Now, with the euro closer to $1.48, the dollar is "more of less where it should be based on economic fundamentals," said Vassili Serebriakov, foreign exchange strategist at Wells Fargo in New York.

But, into 2009, many say all the Treasury has done is erected a speed bump that will slow the dollar's recovery against the euro.

The euro zone is still in for a tough period ahead, and easing inflationary pressures will help the ECB shift its focus and cut rates, said Germanier of UBS.

Those fundamental forces will ultimately limit the euro's gains, several analysts said, and challenge another run to $1.60.

LONDON (Dow Jones)--Financial market uncertainties may be helping the pound for now. But a further sharp deterioration in the U.K. economy and rising expectations of more rate cuts are making sterling more vulnerable to a sharp selloff.

"Prepare to sell sterling with gusto as the Bank of England moves towards earlier rate cuts," recommended David Simmonds and Adrian Schmidt, foreign exchange strategists with The Royal Bank of Scotland in London.

Noting that the gyrations in global financial markets dominated the pound during the last week, the currency strategy team at UBS in Zurich said that the market has "yet to move to the real economy end game."

"When it does, we'll be recommending selling sterling," they said in their latest summary of foreign exchange.

The impact that global considerations are having on the pound were particularly evident in its rally against the dollar after last Friday's announcement of a $700 billion government bailout package for U.S. banks.

The pound broke through a 40-day moving average at $1.8518 and tested $1.8600 for the first time in a month or so.

There were also signs that speculators are still cutting short positions in the U.K. currency, contributing to its ability to stabilize.

But, said Callum Henderson, head of foreign exchange strategy at Standard Chartered in Singapore, "it is important to note that this is short-covering and in no way reflects any improvement whatsoever in U.K. fundamentals, which have yet to bottom let alone improve."

So far this week, Rightmove reported that the decline in U.K. house prices may have slowed, but they still fell by 1% this month. The British Bankers Association said that mortgage approval growth amounted to only GBP2.1 billion in August, less than half the GBP4.8 billion increase in July and the lowest level in record.

Hans Redeker, head of foreign exchange strategy at BNP Paribas in London, said he expects "the real shocker" to come later Wednesday with the release of the latest Confederation of British Industry survey, which is expected "to confirm imploding consumer conditions."

The outlook for the U.K. economy hasn't been helped by the Labour Party conference in Manchester this week. Political uncertainty continues to prevail as Prime Minister Gordon Brown clings to power despite opinion polls showing that he is the most unpopular prime minister since the 1930s.

To make matters worse, the chancellor Alistair Darling indicated that the government might attempt to spend its way out of trouble, leaving the public finances in an even more dire state than they are already.

Sentiment towards the U.K. economy also wasn't helped by the uncertain market reaction to the U.S. bailout plan. As UBS strategists pointed out: "The U.K. remains most dependent on the global banking system, with 5,000 jobs lost in the city on Monday alone."

All this is gradually translating into increased expectations of rate cuts from the Bank of England sooner rather than later, with the bank's deputy governor, John Gieve, hinting to an industry conference that he might support a rate cut later this autumn given the economic slowdown and indications that inflation pressures may be subsiding.

Market participants will now be waiting to see if other members of the bank's monetary policy committee express similar views in public statements later this week.

"We can find very little positive to say about the outlook for the U.K. economy," said Simon Derrick, a senior currency strategist with Bank of New York Mellon in London.

But, like other analysts, he acknowledges the pound's resilience so far.

"However, we must also face the fact that the pound put in a robust performance over the past week despite it all," Derrick said.

He argued that the sharp rise in commodity prices could mean that the market is reassessing the extent of further rate cuts, given a sharp retreat in short sterling futures prices.

Nevertheless, the pace of the economic slowdown is still expected to dominate both policy direction and sterling's value in the medium term.

BNP Paribas' Redeker points to the slight losses the pound is tending to show on the crosses, running into selling around Y196.00, falling back below CHF2.0200 and with the euro finding support at GBP0.7900 despite the single currency's decline elsewhere.

Early Wednesday, the pound was a little lower - falling to $1.8544 by 0645 GMT from $1.8575 late Tuesday in New York, according to EBS. The euro was up at GBP0.7925 from GBP0.7918.

The dollar was still getting a lift from reports that Warren Buffett's Berkshire Hathaway will be investing $5 billion in Goldman Sachs - a move that should inject further calm into troubled financial markets.

As the Nikkei rallied 0.2% on the news, the U.S. currency rose to Y105.98 from Y105.32. The euro fell to $1.4699 from $1.4707. The euro rose to Y155.78 from Y154.80 as risk aversion showed signs of declining a little.

Dunno if this is a AM issue, but have you noticed (for a while now) that there's summat up with the interactive chart and currency rates in the header thingy?

Seems OK here, Chocopops, although it's sometimes a little sluggish. I'm using Opera.

Could you upload a screenshot onto your chocolate cream thingey?

Here you go



Cable was around 1.8579/82 at the time.
It would seem for me that the rates are very sluggish and the chart doesn't stream.
Still using IE7 - could it be this dratted Spybot resident? Haven't managed to disable it, and it does make for heavy weather on the AM site at the best of times. And my pop-up blocker is running hot :S

Oh yes. I can see what you mean. I've got the same thing.

I'll keep tracking it for now.

To be honest, Hil - it's not an issue for me, but it certainly is a great snapshot for visitors.
Don't go spending time on it before Dezza or Ian have obviated the AM f-factor :)

I doubt that I could do anything about it in terms of fixing this chart, Chocopops, although I can always bung a different chart into the header if this one doesn't improve.

NEW YORK (Dow Jones)--The dollar reversed overnight losses against the yen Thursday morning with a shift in investors sentiment that saw a rise in U.S. stock markets.

The dollar recently rose as high as Y106.47, as financial markets brightened on signs of progress on the government's $700 billion rescue plan being debated in Congress.

The dollar also rose to an intraday high against the U.K. pound and made progress against the euro, although it remains down on the day versus the common currency.

But in another sign that risk sentiment is picking up, the euro recently hit an intraday high against the yen as well at Y156.35. Traders often sell the lower-yielding yen in search of higher yields when risk appetite swells.

The dollar's swing upwards disregards the release of three disappointing economic reports from the U.S. Thursday.

That's why Kathy Lien, director of currency research at Global Forex Trading in New York, advises: "Don't trust this rally."

Thursday morning in New York, the euro was at $1.4659 from $1.4622 late Wednesday. The dollar was at Y106.46 from Y106.13, according to EBS. The euro was at Y156.00 from Y155.14. The U.K. pound was at $1.8466 from $1.8480, and the dollar was at CHF1.0858 from CHF1.0913 Wednesday.

The U.S. government reported Thursday that new-home sales slumped to the lowest level in 17 years in August and prices kept dropping. Inventories also fell, but the ratio of houses for sale to homes sold rose.

In addition, the U.S. Commerce Department reported demand for expensive manufactured goods plunged during August, dropping far below expectations in a broad-based decline involving nearly every sector,

In another report, the number of U.S. workers filing new claims for unemployment benefits unexpectedly soared last week to its highest level since just after the Sept. 11 terrorist attacks seven years ago, as a mix of economic weakness and recent hurricanes in Louisiana and Texas pushed claims near the half-million mark.

"However, these depression-like numbers failed to put a dent into the U.S. dollar as investors hold their breath for the approval of [Treasury Secretary Henry] Paulson's Troubled Asset Relief Program," said Lien. "The euphoria in the markets could be short-lived since the stock and currency markets have been very fickle."

Hi Choccie
In case you were wondering if anyone reads your posts.... I do

I don't :-)

Oh you're both soo sweet ;)


NEW YORK (Dow Jones)--As the U.S. Congress hunkers down to decide on the government's $700 billion bailout proposal for the banking sector, dollar bears are getting ready to strike.

Expectations are high that lawmakers will quickly approve the plan, perhaps before the weekend and probably with only a few minor adjustments - maybe by adding vague wording that discourages excessive salaries for executives.

Stock markets could certainly surge on the news of Congressional approval, but the dollar is unlikely to respond in kind, and might even take a sharp turn lower.

Currency investors are likely to focus on the grim reality of the bailout, which pinpoints with GPS accuracy just how distressed the U.S. financial system is and how vulnerable the dollar could become. Approval likely would mean the U.S. government will have to issue vast amounts of Treasurys, which would lead to concerns that inflation will rise.

We're not talking about the modest type of inflation seen in normal times, which leads the Federal Reserve to lift interest rates and helps the dollar by boosting yields. Rather, the worries are that prices could soar, sharply cutting the dollar's purchasing-power, making the currency unappealing for both Americans and foreigners.

This spike in inflation could hit just as the economy stalls. The Fed wouldn't lift rates in such an environment, and the situation could deteriorate fast into stagflation as ugly as that seen in the 1970s.

Fed Chairman Ben Bernanke, perhaps offering himself an out if such a scenario does develop, told lawmakers on Wednesday that while inflation should moderate, there are "significant" risks to that outlook.

Enactment of the bailout plan, said Kathy Lien, director of currency research at GFT Forex, "would cause a destruction of the U.S. balance sheet by increasing the nation's debt ceiling by 6.6% to $11.315 trillion."

The dollar has already taken a hit on the initial shock of what the bailout plan means. The euro, which was trading at $1.43 against the dollar a week ago, was 3 U.S. cents higher at $1.46 Thursday. With the expected approval of the plan, analysts say the euro could easily begin to creep up toward $1.55, though most doubt the single currency would re-test its lifetime high of $1.60 reached in July.

Of course, there's the off chance that lawmakers reject the bailout, or delay its passage for an extended period. This would no doubt cause risk aversion to spike, leading investors to dump their higher-yielding bets in emerging markets. The dollar could benefit, as many overseas investments are paid for in dollars.

The dollar has recently been benefiting from risk aversion and times of inter-bank funding stress.

But even if the dollar did catch some risk aversion tailwinds, its gains would probably be short-lived. Investors, digesting the gravity of the failure of a plan to resolve the U.S. banking mess, would start to re-think their long-held belief that the U.S. currency is a safe haven in turbulent times.

"There's a big problem, and the [bailout plan] is a reflection of that," said Daniel Katzive, currency strategist at Credit Suisse in New York. "Both scenarios [lawmakers' approval or rejection] still point to a weaker dollar."

Sure, the plan is an important step in direction of solving the U.S. financial debacle, and helping the economy start to get back on its feet.

"But perhaps a weaker dollar is one of the side-effects of the problem, and a weaker dollar may even be a necessary part of solving the problem," Katzive said.


Other Currencies Weak, Too, No?

Of course, dollar bulls will argue the problems facing the U.S. financial system and overall economy are quickly spreading to the rest of the world, making currencies such as the euro and the yen just as unappealing, if not more, than the dollar.

True enough, the financial sectors in other countries and other regions of the world haven't been spared, and their economies are struggling alongside the U.S. But GFT's Lien argues the rest of the world's financial systems are not being completely upended like they are in the U.S., where centuries-old banks have crumbled.

Other countries "aren't facing same system risk that U.S. banks are," she said.

Lien argues that liquidity, or a lack of funding is not the main issue facing the U.S. financial system, and points out that hedge funds still have a bunch of cash.

"Cash is not the rare commodity here, it's the lack of a willingness to lend," she said, adding that this is not so large of a problem elsewhere, and will therefore allow other currencies to retain an edge over the dollar.