Tags: feds | dollar | slide

Report: Feds Unworried By Sliding Dollar

By    |   Monday, 09 Nov 2009 09:50 AM

U.S. economic officials aren’t worried about the dollar’s drop to a 14-month low.

CNBC reporter Steve Liesman, after talking to these officials in private conversations, wrote on CNBC.com, “While U.S. officials publicly support a strong dollar, in private they don't appear so worried about its recent slide.”

One benefit of the dollar’s decline is that it helps curb the U.S. trade deficit by making our exports cheaper and our imports more expensive.

As for his conversations with officials, Liesman wrote, “Though they work in different branches of government, their commentary has been pretty similar: They do watch the dollar carefully, but they see its decline so far as orderly and not yet an inflationary threat.”

The officials view the dollar’s 13 percent decline so far this year as basically a correction from its surge during the financial crisis last year.

Some critics of the weak dollar say it will make foreign investors reluctant to keep buying Treasuries.

But officials “point out that the United States has had surprisingly little trouble selling its debt, with auctions routinely oversubscribed by healthy levels. . . They add that foreign participation has remained strong, and they hear little concern about the dollar from market participants,” Liesman writes.

Others, such as legendary investor Jim Rogers, are more worried about the dollar’s status.

“The dollar is a terribly flawed currency,” he told Moneynews.com, arguing that it will lose its status as the world’s main reserve currency.

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U.S. economic officials aren’t worried about the dollar’s drop to a 14-month low.CNBC reporter Steve Liesman, after talking to these officials in private conversations, wrote on CNBC.com, “While U.S. officials publicly support a strong dollar, in private they don't appear...
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Monday, 09 Nov 2009 09:50 AM
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