> >DAILY FINANCIAL MARKET COMMENT 05/20/03 Goldman Sachs Economics
The thing I don't get about the dollar's drop against the euro is how it's supposed to do much about the trade deficit, when something like three quarters of the deficit is with five or so East Asian countries -- most of whose currencies so far haven't risen very much (and China's hasn't changed at all, of course). Europe doesn't account for much of our trade deficit. Yet most of the dollar's slide has happened there. The only thing I can think of is that it could pressure the ECB to cut interest rates.
Seth