When the going gets weird, the weird turn pro. - Hunter S. Thompson

13 May 2006

WSJ: U.S. Goes Along With Dollar's Fall to Ease Trade Gap

The Bush administration is quietly acquiescing in the dollar's recent slide, a potentially risky approach but one it hopes may gently narrow the yawning U.S. trade gap by realigning world currencies.

On Friday, government data showed that gap shrank in March. The Commerce Department said the monthly U.S. trade deficit narrowed to $62 billion, the smallest figure in seven months, spurred by record exports and an import bill that dropped somewhat despite high oil prices.


...[B]acking currency depreciation can be tricky. The dollar's slow slide could become a steep plunge if markets turn against it -- particularly if investors fear that U.S. officials are trying to engineer a drop. That's why the administration isn't calling attention to its stance, except for attempts to press China and its neighbors to strengthen their currencies.
Wall Street Journal (subscription required) - U.S. Goes Along With Dollar's Fall to Ease Trade Gap

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