How can that be?
The Fed’s move put more pressure on the U.S. dollar because it made returns on investment in other countries more valuable. The weak dollar also means that American goods are cheaper for overseas buyers, which can help manufacturing and producers, and it can help companies with big foreign operations turn a larger profit by converting overseas profit into dollars.
On the other hand, a steadily weakening dollar could also discourage foreign investors who buy the country’s debt. As investment in U.S. Treasury securities dwindles, the government will have to pay higher rates at weekly auctions to find buyers for its bills, notes and bonds. That eventually could push up borrowing costs for all Americans.
Originally posted 2009-03-31 01:47:10.
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{ 5 comments… read them below or add one }
What is going to happen is that the Euro will become the ‘international currency of choice’.
What a comedown for the ‘mighty US dollar’.
The US economy has been managed very badly in the last couple of years.
[How can that be?]
It increases exports and decreases imports.
Its one thing for the dollar to fall for overseas investment purposes.
Its another thing when the dollar is in a free-fall mode, which it appears to be right now.
Can you ever recall a time where the Canadian dollar was worth more than the greenback?
A weaker dollar is NOT better than than a strong one lol. Anyone who thinks that should be deported.
A weak dollar might have superficially positive side effects, but it is not better haha.
That’s nice. Great for billionaire foreigners. As for the American people, they can just rot, I suppose. As long as the rich get to keep theirs, screw the average Joe.