U.S. Dollar’s Credibility Being ‘Stretched,’ UBS Economist Says
The U.S. dollar’s credibility as the world’s benchmark currency will be put to the test as it loses value against other major currencies, said George Magnus, senior economic adviser at UBS Investment Bank in London.
“We’re clearly at a point where credibility is being stretched, and we don’t really know what comes afterward,” Magnus said in an interview.
Magnus said that while it’s unlikely governments and companies in emerging economies in Asia and the Middle East are ready to “ditch the dollar” and price assets in other currencies in 2008, the dollar is being “severely tested.”
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