Wednesday, October 20, 2010

Geithner Weak Dollar Seen as U.S. Recovery Route Versus BRICs

"It is very important for people to understand that the United States of America and no country around the world can devalue its way to prosperity, to [be] competitive," he said. "It is not a viable, feasible strategy."

Source: edegrootinsights.blogspot.com

It took one day for a complete flip flop. Confidence in the leadership behind the U.S. dollar greatly influences its exchange rate.

For U.S. Treasury Secretary Timothy F. Geithner, a weaker dollar may now be in the national interest.

The dollar has dropped more than 7 percent since Aug. 27, when Chairman Ben S. Bernanke signaled the Federal Reserve is prepared to ease monetary policy. Where once such a decline may have been met with resistance from the U.S., Geithner may now be tolerating it as a way of bolstering the recovery.

Source: nytimes.com

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