By Thomas R. Keene
Nov. 24 (Bloomberg) -- Today's plunge in the dollar's value against major foreign currencies shows ``a run on the U.S. dollar is underway,'' according to Brown Brothers Harriman & Co. strategists.
The ``extreme'' move comes amid ``relatively thin market conditions'' and may be reversed ``as full liquidity returns,'' writes Marc Chandler, global head of currency strategy at Brown Brothers in New York, in a note to investors today.
``Rather than jump onboard what appears to be a southbound dollar express, traders might be better advised to take some profits and wait for the next train,'' writes Chandler.
The chart of the day shows changes in the value of the British pound sterling versus the dollar during the second half of this year. The blue mesh depicts one measure of trading volatility, a band of three standard deviations on either side of the 20-day moving average in the pound's value. Trading falls within the three-deviation range 99 percent of the time. Note that today's pound-dollar trading (the green circle) is outside the band at $1.93. The pound last traded above $2 in 1992. {GBP
Chandler suggests the dollar may strengthen because of a set of economic and political realities including a tight U.S. labor market that could elevate inflation, weak Japanese domestic demand, and ``objections to further euro appreciation'' among European
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