Dollar to rise?

Having collated and posted articles that variously blame the falling dollar for the increase in the price of food and the price of oil, this article from the New York Times could be a first positive sign. <link

“After six years of stumbling against the euro, the dollar may be showing signs of getting back on its feet.

“Two weeks ago, the dollar hit a new low of $1.60 for the euro amid expectations of lower interest rates in the United States and possibly higher rates in Europe….

“Since then, the dollar has strengthened — it closed at $1.55 Tuesday — and some economists say that even if it creeps down slightly, the dangers of a precipitous fall, at least against the euro, have subsided.”

Sounds like good news. That is until you get to the end where in typical economist manner there is a dissenting view.

“Mr. Feldstein said that as a result, he projects that the dollar may still have further to decline because, although the trade balance has narrowed recently, it is a long way from disappearing. “I think the dollar has substantially further to fall,” he said.”

All I know is that the dollar seems to have appreciated against the pound in the past few days and from my reading that seems to be a good thing.


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