Euro Retreats From Brutal Rally Against U.S. Dollar After Hitting an All-Time High BERLIN (AP) -- European Central Bank president Jean-Claude Trichet expressed concern Monday about the growing strength of the euro, saying a rally that sent the shared currency to a fresh all-time high was "brutal" and "not welcome." <snip> Full at: http://biz.yahoo.com/ap/041108/euro_dollar_10.html _____________________________________________________________ I know that the Yen has been at around 105 for quite a while now and that is well below what the US would like. I recently ran across this MSN guy Fleckenstein, billed as a "contrarian", who comes on pretty strong about the imminent decline of the dollar:
I believe that in hindsight, we will look back on a news story from Oct. 21 as the biggest development in the foreign-exchange market of the last 19 years, since the Plaza Accord of 1985.
In the Oct. 21 report, Bloomberg News reported that Dutch Finance Minister Gerrit Zalm, prior to chairing a meeting of the European Union ministers, said the euro's advance was "not an issue." When asked if worried about the currency trading at $1.30, he replied: "It is good for oil prices."
Finance ministers are usually more political than central bankers, which makes this statement from Zalm more powerful. And, the sentiment was echoed by many of his colleagues, including:
French Finance Minister Nicolas Sarkozy: "A strong currency is better when commodity prices are high."
European Commission President Romano Prodi: "Certainly the euro is very high at this moment, but it's not true that European trade is bad. . . . (The euro's increase) has been some sort of protection (against oil costs)."
Spanish Economy Minister Pedro Solbes: "(The euro's rise) could help to offset the oil price rises in terms of inflation." <snip> Full at: http://moneycentral.msn.com/content/P93619.asp ___________________________________________________________ I guess my bottom-line economics know-nothing question is: Can the dollar weaken to a point where it causes major economic problems for the US? Any idea what the Bush strategy is to offset this probability? Cheers, Greg
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