US dollar slump continues
The U.S. dollar's slump on world currency markets continues, and there is no way to stop it. The greenback still hit new all-time lows against some of the major currencies, like Euro, new record values seem to be broken every week. For US Exporters this is not a big problem, is a good deal for times of crisis, a cheaper dollar helps boost exports, as American products look cheaper to foreign buyers. Most of the US exporters will definitively increase their profits in the next quarters, so pay attention to their stocks. However, the major problem in this entire scenario is the American Consumer, who is the main victim of this problem. From now on, the costs that Americans will pay for food and energy will not be more the same, higher prices may be coming again. The biggest risk to the U.S. economy from a weak dollar is that it will drive up inflation, the rise of prices across the economy, as import prices climb. The weak dollar also drives up the price of oil and other commodities that are traded internationally in dollar contracts. Foreign producers of such commodities raise their prices to ensure that they retain the same purchasing power they had before the dollar weakened. It's far from obvious that you will see an inflationary push from the weaker dollar in the coming months. That may depend on how low the dollar goes and how long it stays low. Now, with so many questions pairing in the air across the board, we can put this question in the air too. How long will the dollar remain the world's premier currency? Is the end of the giant in the currency market ? What do you think ? Some people already started to invest in euros as a reserve currency and less in dollars.AC
Labels: Dollar
