Pace of Dollar Decline Reflects Currency Market’s QE3 Bets, Citigroup Says

The dollar’s drop over the past week suggests currency traders may be speculating that the Federal Reserve will implement a third program of asset purchases, known as quantitative easing, Citigroup Inc. said.

“The pace of dollar weakening during the past week is noteworthy,” Greg Anderson, a senior currency strategist at Citigroup Inc. in New York, wrote in a research report today. “It certainly supports the notion that foreign-exchange markets are beginning to price in QE3.”

The Dollar Index has dropped 2 percent in the past week. It was 0.2 percent lower as of 6:53 a.m. in London today, at 74.408.

To contact the reporter on this story: Paul Dobson in London at pdobson2@bloomberg.net

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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