Investor Agenda

Should the Fed Save the Dollar by Hiking Rates?


The Greenback has seen its share of red arrows in recent days.

Prior to today's gain, the dollar has been mired in a four day losing streak.

Its recent setback was one the catalysts that drove gold to a new nominal record this week.

We've seen this week's reports that Arab oil producers are planning with nations like Russia, China, France and Japan to end dollar transactions for oil in favor of a basket of alternative currencies. This comes on the heels of continuous chatter from China about its concerns about the role of the US dollar. With all this talk about the Greenback's 'demise' - one question that is taking on more urgency is, whether or not the Federal Reserve should take some course of action to stem its slide?

Raising rates would send a strong signal about the U.S's intention to protect the dollar and stabilize prices. But is this a realistic scenario? And even if the Fed felt motivated to make such a move, would it be sooner than later?

Already some banks are making their own predictions. Deutsche Bank recently cut their 2010 dollar-euro forecast amid the expectation that the Fed would lag other central banks when it comes to rate hikes.

Take our poll below. We'll explore that issue today at 3pm on the Closing Bell.



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