US dollar tanks on QE speculation; emerging markets do to better, Pimco says

The US dollar fell to a 15-year low against the yen, and plunged almost 1% against the euro and sterling, as investors fear the world's largest economy is still far from a strong recovery path. The Federal Reserve may announce a second round of money printing, hoping that buying bonds in the market will inject liquidity and re-ignite the country's economy. The dollar fell to 81.24 yen, down from 81.81 yesterday. It also fell to to $1.40 per euro, and to $1.60 per British pound. Investors' eyes will be fixed on Federal Reserve Chairman Ben Bernanke tomorrow, when he is expected to speak on monetary policy objectives. Investors have speculated about a new round of Quantitative Easing earlier this year as the Fed has already indicated it is prepared to do so -although without confirming any specific plans. Emerging market currencies are expected to rise against the US dollar, reflecting their big and strong economies, said Pimco, the world's biggest bond investor. "PIMCO believes the investment opportunities in the EM are among the most attractive in an uncertain, New Normal world," said Pimco's Curtis Mewbourne in a letter to investors. About half of General Motors' sales this year, for example, are generated outside the US and Europe, Pimco said.