Tags: Dollar | weaken | Decade | cbo

CBO: Dollar to Weaken Gradually Over a Decade

Thursday, 25 Aug 2011 07:25 AM

The dollar will weaken gradually over the next decade and possibly lose its status as the world's reserve currency, according to a forecast published by the Congressional Budget Office.

"So far this year the dollar has dropped sharply even through the European debt crisis continues to unsettle international financial markets," the Congressional Budget Office says in a report, according to the Wall Street Journal.

"That fall has prompted questions about whether the status of the dollar as a reserve currency and a safe haven in times of economic crisis has diminished because of investors' concerns about rising U.S. government debt."

dollarsgetty200.jpg
(Getty Images photo)
On top of government debts, rising overseas interest rates, spikes in oil prices and a generally weak U.S. economy are zapping the strength out of the dollar.

"The exchange value of the dollar…will remain low, keeping the relative prices of imports high for U.S. households and businesses and the relative prices of U.S. exports low for foreign buyers."

Private economists agree that cheap imports may be a thing of the past, at least for some households.

"The bad thing about having a weak U.S. dollar is that import prices are more expensive," says Gregory Daco, an economist with IHS Global insight, according to NPR.

________________________________________________________
Editor's Note: Exposed: You Deserve to Know What Obama and Bernanke Are Hiding From Americans
Click here to watch this gripping Newsmax investigative report that reveals the truth about America's economic future and the disastrous path that Obama’s and Bernanke’s reckless policies are taking us down.
_________________________________________________________
The automobile industry, however, may applaud a weaker dollar as it will make U.S. cars and auto parts less expensive abroad.

"The weak dollar is good for manufacturers in the U.S., whether they're the Big Three or German or whatever, because they can export at an advantage," says Michelle Krebs, an analyst for automotive information site Edmunds.com, according to NPR.

© 2017 Newsmax Finance. All rights reserved.

 
1Like our page
2Share
StreetTalk
The dollar will weaken gradually over the next decade and possibly lose its status as the world's reserve currency, according to a forecast published by the Congressional Budget Office. So far this year the dollar has dropped sharply even through the European debt crisis...
Dollar,weaken,Decade,cbo
315
2011-25-25
Thursday, 25 Aug 2011 07:25 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved