Dollar slumps as Fed forecasts lengthy recovery - papers

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The euro rocketed to a two-month high of $1.29 and sterling jumped two cents to almost $1.54 after the Fed confessed that the US economy may not recover for five or six years.

Far from winding down emergency stimulus, the bank may need a fresh blast of bond purchases or quantitative easing, the Telegraph reports. Usually the dollar serves as a safe haven whenever the world takes fright. Not this time. The US itself has become the problem. "The worm is turning," said David Bloom, currency chief at HSBC. "We're in a world of rotating sovereign crises. The market seems to become obsessed with one idea at a time, then violently swings towards another. People thought the euro would break-up. Now we're moving into a new phase because we're hearing alarm bells of ...

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