The day the dollar died?

I arrived back in JHB on Monday last week to discover that the US dollar had slipped below the R10 to the US Dollar mark. I have to admit that I had mixed reactions to seeing this.

Will I look back on 22 December 2008 and see it as the Day the dollar died?

The dollar has only managed to gain 3.3% of value against the euro since the start of the year and has been under significant selling pressure in the last few months. Against the Yen the US dollar has seen the biggest annual decline for the last two decades, this year.

From my perspective I make some handy money from things like Google so a weaker Rand vs. the dollar is useful.
HOWEVER times are a changing and I guess its going to be interesting to see what happens in the global currency market over the next decade or so.

Can't remember if I blogged about it, but a few weeks back I sat through a presentation by one of these strategist types for one of SA's big banks and he was predicting a major shift away from not only US equities into Asian equities but also a move

away from the dollar as the world standard currency.

I can buy the theory that positioning yourself for movement in the Asian equity market makes sense and have been trying to angle a part of my portfolio this way

While the euro has been the early short term this strategist is expecting currencies like the Singapore dollar to become increasingly important in the bigger picture.

So lets take a look at this currency.

As of this morning, the Singapore dollar (SGD) is trading at 1.43870 SGD to US$1.

Not being a trader in the currency market I'm going to make a note of this figure and track it on a weekly basis and see whether the money is shifting into Asia.

I'm going to do the same for the Yen, Chinese Yuan Remimbi, the Hong Kong dollar, the Thailand Baht and the Vietnam Dong. For good measure I've thrown in the Indian Rupee because of India's growing importance in the bigger picture.

US$1 vs. Japanese Yen = 90.3261
US$1 vs. Chinese Yuan Remimbi = 6.82252
US$1 vs. Hong Kong Dollar = 7.75005
US$1 vs. Thailand Baht = 35.0630 (international rate)
US$1 vs. Vietnam Dong = 24,704.36
US$1 vs. Indian Rupee = 48.4366

I'm not totally convinced the dollar is "dead" - purely because many Asian economies remain heavily export dependant and it suits them to have weaker currencies.

Throw in the fact that in the short term there is political uncertainty in places like Thailand and war tension in India and Pakistan, I suspect that while these currencies make some ground vs the US dollar in the longer term there will be some issues counting against this basket of currencies.