Sandy Won't Dent the Dollar: Pro
By: Kelley Holland | News Writer
The dollar's safe-haven status is just one factor that will keep it strong as Hurricane Sandy's floodwaters recede.
For those of us in the New York area, Hurricane Sandy has been enormous. But the storm's force won't be sufficient to drag down the dollar, says Sean Callow, senior currency strategist at Westpac.
Callow told CNBC that the greenback's safe-haven status will boost demand for the currency, what with New York markets temporarily out of commission.
"Liquidity is really a very big issue when you've got the New York market out, and we're going form London to Wellington as far as price-making is concerned," he says. "Perhaps the U.S. dollar is your safest bet as you just wait for the storm to play out."
Then there is the matter of reinsurance.
Callow notes that European reinsurers could have some exposure to the storm. If they have to pay significant claims, "then potentially that's some demand for U.S. dollars as well at the expense of the euro."
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