Archive for November 9, 2007

Narrowing Trade Deficits and Lamenting Euro Chiefs

November 9, 2007 @ 6:12 pm · Filed under Economics, Finance, US

One thing that a lot of people seem to forget is that while a falling USD is not a good thing, it certainly isn’t bad all around for everyone. For instance, the cheap dollar has made items made in US extremely competitive in terms of pricing, especially in comparison to European goods and services within Europe.

As a result, a lot of US products have been in high demand (especially high-tech), causing a serious surge in US exports which has lowered the US trade deficit to record lows in more than 2 years.

And the consequence of a weaker dollar is making it harder for Americans to spend on European goods and services, making the European Central Bank chief to worry that the recent rise of the Euro against the dollar is making life harder for European businesses.

Now China — that’s an entirely different story altogether.

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