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Good News! The Dollar Is Down

 
John Lee
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Unlike the bursting of the stock-market bubble, however, the dollar's drop is good news, on the whole, for the U.S. economy.

What's more, while the dollar's drop is causing deep pain for European, Japanese, and many other foreign exporters right now, eventually, it could be a net plus for the global economy if America's trading partners respond by cutting interest rates or loosening fiscal policy.

Asian nations have acted to prevent their currencies from appreciating against the greenback. Japan sold $20.5 billion worth of yen in the first quarter in a move that limited the dollar's slide. And China, whose first-quarter trade surplus in goods with the U.S. soared from $7 billion in 1996 to $25 billion today -- giving it the world's biggest surplus with the U.S. -- has kept its carefully controlled currency steady against the dollar.

Good News! The Dollar Is Down
 
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