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For those who say that the US dollar is going down because of the
¡¥unsustainable US trade deficit,' it is worthwhile pointing out that at 6.5% of
GDP, Australia's current account deficit is worse and at 5.5% of GDP, Britain's
is approaching American levels. Yet sterling and the Aussie dollar have been two
of the strongest currencies this year, rising 24% and 32%, respectively against
the greenback. So, as your comments (¡¥it matters when it matters') implicitly
suggest, the ¡¥unsustainable US current account' is really an ex post facto
rationalization for those getting on a speculative bandwagon
I agree with the analyst on http://www.trl.co.nz/trlfx/pages/trlfx.htm who posts here occasionally i.e. the Euro is repeating the pattern of early Jan 2004.
John F.
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