The Trump administration is again toying with the idea of abandoning the strong dollar policy
supported by the past four administrations and might intentionally weaken the dollar, instead.
But that's small potatoes compared with what could happen if foreign investors believe the US was abandoning its long-standing strong dollar policy
. Those investors, who own about half of all US government debt outstanding and help finance the budget deficit, would be less inclined to own dollar-denominated assets if they felt the US was pressuring the greenback lower.
But we will suffer from the strong dollar policy
and the general weakening of global growth.
Worries over borrowing in recent years have seen the dollar weakening, despite US Treasury highlighting that the country has a strong dollar policy
strong dollar policy
. But they made no comments that reined in the dollar's recent weakness.
support Washington's strong dollar policy
, with Fujii stressing "a strong
The dollar rally against most other currencies was primarily attributed to comments from ECB President Trichet, who said that he supports a strong dollar policy
, said Kathy Lien, director of currency research at Global Forex Trading.
"The US believes in a strong dollar policy
and believes that the strength of our economy will be reflected in the dollar," he said ahead of the Group of Eight (G8) nations summit in Toyko in northern Japan.
CAPE TOWN: US Treasury Secretary Henry Paulson said yesterday Washington was following a strong dollar policy
and indicated he expected it to rebound, emphasising the US economy's long-term strength should help the currency.
In sum, the strong dollar policy
, and the implied pledge behind it, has given confidence to both foreign and domestic investors that capital is protected from the policy risk of devaluation.
The US administration says it "favors" a strong dollar policy
, but business associates nevertheless believe they will reap a bonanza from the stimulus that a weak dollar will give US exports.