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COPYRIGHT 2005 The Dallas Morning News
Byline: Danielle Dimartino
Feb. 28--Last week, everything changed.
Henceforth, economic reports will be interpreted based on their potential to impact the dollar.
"Up until recently, I don't know that investors focused on the consequences of economic data on the dollar," said Carl Tannenbaum, chief economist at La Salle Bank in Chicago. "Perhaps justifiably, they concentrated on what it would mean for stocks, bonds and the Fed."
But Tuesday's meltdown in stocks proved the importance of the greenback in the financial markets. All it took was one report that the South Koreans would begin to diversify their foreign reserves out of the dollar.
The South Korean government quickly clarified that there would be no imminent exodus. The whiff of panic, though, proved substantial enough to spark the worst one-day sell-off in the Dow Jones industrials in 18 months.
"The financial markets remain very...
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