US$ is sliding further as more investors lacking confident in the greenback. Many called for further interest rate cuts but the question is will the money goes into buying US$ to keep equity market as well as the currency stable?
What will happen if the interest rate goes down? Fix income instrument in the US$ denomination will be less attractive, at the same time equity which already taking a beating due to subprime uncertainities will be further deteriorate as the currency is dwindling. This all-bad cycle, the currency, equities and fix income instruments, cant be stopped just by adjusting the interest rate alone. What Malaysia did last time was examplary, get out of the system!!!
The more liquidity in the system is, the worse it's going to be for the greenback as more monies will be rushing out!
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