Thursday, December 23, 2004

A new high

The dollar hit $1.35 to the euro yesterday, based on tepid financial news from the US and moderating information about the European economy. This figure had previously been said to be a tipping point, the level at which European financial folks would begin to intervene to support the dollar. No such move has been mentioned lately, and as the article in Forex states, the dollar may slide as low as $1.50 next year, a low that may be necessary for the US to begin softening its trade imbalance. (The idea is, apparently, that at some point the dollar may be so cheap to Europeans that they start buying US products--and of course the US consumer and traveler pays the price because they can no longer afford anything European.)

If I were holding dollars, I'd be bailing out. Wait! I'm holding dollars!

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