Economics Topics
Economics Topics
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Dollar / Euro / ?
The Bush administration is leading the international effort to put a floor under the falling dollar.
The conventional wisdom holds that the Europeans, worried that the mighty euro is making their companies less competitive, prodded Treasury Secretary Henry Paulson and other group of seven finance ministers last month ...
The European CommissionÂ’s report on the future of the euro area has not been getting the deserved attention in European newspapers, which is why we are (unusually) running a special edition summarising, and commenting on, some of its key recommendations.
The others big news yesterday was the now ...
The European Central bank is keeping a close eye on the recent sharp fluctuations in exchange rates, ECB President Jean-Claude Trichet said Thursday. “We’re concerned about the possible implications for financial and macroeconomic stability,” Trichet said, while speaking on the sidelines of a statistics conference in Frankfurt.
He added ...
With the euro having jumped above the mark of 1.60 $ for the first time in history, recent macroeconomic data shows that the strong currency is taking its toll on the continental European economy. The advance manufacturing PMI for the euro-area for April published today fell by 1.2 points to ...
Jean-Claude Juncker, the EU's 'Mr Euro', has given the clearest warning to date that the world authorities may take action to halt the collapse of the dollar and undercut commodity speculation by hedge funds.
"I don't have the impression that ...
According to this article in the Wall Street Journal, the G7 have decided to complain about the dollar's poor performance.
That is in effect what Federal Reserve Board Chairman Ben Bernanke and Treasury Secretary Henry Paulson said when they announced they will intervene in currency markets to keep the dollar from falling further. When the dollar falls, it benefits workers who work in industries subject to international competition (e.g. manufacturing ...
The pound hit a new record low against the euro, when it traded at 80 pence to the euro. Frankfurter Allgemeine reports that the latest bout of speculation was due to speculation that the Bank of England, which has just cut interest rates by a ...
Kenneth Rogoff says it's a good thing the Euro isn't "fully ready for primetime":
Has the moment come to replace the US dollar?, by Kenneth Rogoff, Project Syndicate: As the world's financial leaders meet in Washington this month at the ... International Monetary Fund annual ...
Foreign central banks aren’t dumping dollars, according to new research by Win Thin, senior currency strategist at Brown Brothers Harriman.
He notes that the Federal Reserve’s custodial holdings for foreign official accounts, which primarily represent holdings from Asian central banks, have risen $145 billion since the end of ...
My friend Barry Eichengreen, together with Marc Flandreau, has written a column in today’s Financial Times, that appears under the headline “Why the euro is unlikely to eclipse the dollar.”    The body of the article is a claim that network externalities and tipping points are not ...
The euro may surpass the dollar in coming decades to become the leading international currency. This column summarises four major challenges that the euro must survive for that to come true.
Full Article: A long term perspective on the Euro
That's what USA Today told readers. It would be interesting if the article explained to readers how it made this determination.
In fact it seems rather evident that the over-valued dollar was a main cause of the country's economic ills. The high dollar is the main cause of a trade ...
And a bit on the IMF's revised forecast for the US.
From Reuters, "U.S.'s Paulson praises China on currency progress":
Martin Feldstein says we're fortunate, the decline in the dollar is coming at a good time:
The dollar is falling at the right time, by Martin Feldstein, Commentary, Financial Times: The dollar’s recent decline ... triggered numerous calls for exchange rate intervention. ... But intervention ...
Or maybe it's just the people who comment on its gyrations. A Reuters piece from today is a case in point:
Loonie slips on US economic outlook: The Canadian dollar slid lower against the U.S. dollar as investors were loath to bet on the currency, given Canada's heavy ...
In reality, of course, the US does not have a dollar policy – other than letting the market determine its value. The US government does not intervene in the foreign exchange market to support the dollar, and the Federal Reserve’s monetary policy certainly ...
Many have asked why. The answer centers around a dislike of the Euro and British Pound. So before proceeding with thoughts about flexibility, let's stop for ...
In the economic policy debate, Germans tend to extrapolate their current situation indiscriminately into the future. When the economy hardly grew at all in 2002 and 2003, German economists and journalists were quick to estimate potential growth to be "below 1 percent". Now, with exports having grown strongly over a ...
By the end of the week, the US price of oil had ...
We have been hearing a lot of anguished comment about the euro-dollar exchange rate. Some are calling for unilateral intervention in currency markets to stem the euro's rise, cuts in European interest rates to take some pressure away, and even a grand political initiative at the level ...
Meanwhile the prices of gold, oil, and other commodities ...
One of the world’s leading international economists explains how the euro could surpass the dollar as the premier international currency and examines the geopolitical implications of such a shift.
Full Article: 18 MAR The euro could surpass the dollar within ten years
Currently, net exports are one of the few bright spots in the US economy. As Krugman points out, this is the one area where monetary policy is proving effective: by driving down the value of the dollar, expenditure switching is being induced.
"We've taken quite a clear position on this in saying that a strong dollar is in our nation's interest".
Paulson can talk all he wants and it won't matter one iota until Bernanke starts ...
I think that President Bush has a good insight in focusing on long-term growth as a determinant of the dollar's path. In particular, I want to highlight the fact that the ...
Last weeks' news about the Eurogroup meeting and the ECB Board meeting revealed a clear rift between the political leaderships in the eurozone and the European Central Bank. For the first time since the euro started its race for ever new historical heights, all Finance Ministers of the Eurozone agreed ...
Michael Giberson
Out in west Texas you can still see the occasional old-style wind mill on a farm or ranch, dutifully pumping up water when the wind blows. A much more common sight these days is the new, sleek wind power generator. A combination of good fundamentals for wind ...
Europe suffered the collapse of a currency system when countries abandoned the gold-exchange standard in the 1930s. What lessons does that break-up offer for the euro today?
Full Article: What history says about the euro’s future
The Washington Post had a front page article telling readers that the "Weak Dollar Fuels China's Buying Spree Of U.S. Firms." The article then gave accounts of the various investments by Chinese individuals and corporations or its sovereign wealth fund.
There is one problem with the Post's story: the ...
Adam Posen, on why recent strength in the euro does not herald its rise to greater international status:
So a strengthening of the euro against the dollar, even for several months in a row, is not indicative of a decline in the dollar’s global role and usage, or ...