08/03/2015
Reached its highest level in 11 years against a basket of other currencies
Dollar raise worries the markets and the bet on US interest
In international currencies race, the US dollar seems to currently train platform as soon as possible, exceed everyone fails at all catch up with him.So the US labor department announced that the national economy added in just one month, specifically in (last February) 295 thousand new jobs, and the unemployment rate fell from 5.7 to 5.5 per cent, even rang the bells that the US economy is in a strong position, and translated inCurrency markets rising value of the dollar against a basket of international currencies to its highest level in 11 years and a half.If the dollar has emerged as a master of international currencies, the epicenter enhance not only the rising value due to increased international demand for it, but also as a result of the decline in demand over his rivals in the market, either the euro or sterling or yen.
Dan Barnoa financial expert at the London Stock Exchange said that the current year will be the year the dollar par excellence, and indicates that the current demand for the dollar will continue for a long time to come.
He's "economic", that the dollar in the best conditions Currently, the US economy is in a state of growth, economic conditions in the United States better than the euro zone and Britain, of course, from Japan, and this will boost demand for the dollar, especially with the low value of gold significantly in recentlythe latter.
But now the question of the beneficiary and the loser with the rise of the dollar,who is responsible for the high dollar?And how it will impact on the US economy and global markets?And for how long the US currency will continue to rise?the questions the economic campaign for a number of British economist to know their views and explore their point of view in this regard.
She says for "economic", Dr. Georgina Katz, a prominent British economist and professor of international trade at Yale University in the US, the rise of the dollar against other currencies will have mixed implications within the US economy.
Katz pointed out that if you are a citizen or an American citizen and want to spend the holiday alone or with your family outside the United States, the rise of the dollar will be completely your own good, as the services to be provided to you will be the prices of less resident in dollars, so high useful dollar companies to foreign tourismin America, and the European counterpart, which is working to attract tourists from America, and quite the opposite of domestic tourism companies in America or companies that rely on tourists coming from outside the United States will suffer due to the high cost of travel and accommodation in the United States as a result of the dollar to continue to rise.Katz noted that the industrial sector, exports and employment all that will be affected in the United States and abroad as well, rise in the dollar means higher US exports expensive, compared to their counterparts from the euro zone, Britain, Japan and China, and this means the need to reduce costs, and often will be done by reducing the number of employees, as it will increase unemployment, and vice versa, as the imports from abroad would be less expensive, which means that the increase in imports than exports and this will lead to a deficit in the trade balance, and will recover the emerging markets and countries producing raw materials exports to America and improving its trade balance, and if the dollar continued to rise could beUS growth falls this year between 0.3-0.4 per cent.
She says for "economic," said Dr. Tim RDO consultant at the World Bank, if it is seen from a different angle power is the main driving the US economy is not export, but domestic consumption, and consumer spending accounts for 70 percent of the US economy, saying that the decline in the dollar means that the declineImports from pasta to the German luxury car prices, luxury car European-made cost in America 70 thousand dollars, and when the conversion rate between the dollar and the euro 1.40, the same car would cost the American consumer $ 57 thousand only when the conversion between the dollar and euro 1.15 price, and then ConsumersThe economy will benefit more from the recovery.
She pointed out that to say that the US industry will suffer as a result of the high dollar, and must be treated with caution, could never be certain sectors will develop setbacks, but other industrial sectors mission strongly benefit, for example, industries that rely on imports of raw materials from Africa, for example, or equipmentengineering from Germany will be in a better position as a result of lower prices for those goods resident in dollars, and will double the interest, whether its products are sold in the US market and are exported, because the high value of the dollar, and then they will profit in the buying and selling process.
Also she said that some of the chairmen of major US companies such as (MSFT) and (PG) and (PFE) has made it clear the US administration to continue the dollar to rise hurt their interests. In contrast, a company such as giant global technology "Apple" It achieves half of its revenue from the sale of their products outsideAmerica, you may beat the rising value of the dollar over the more organized procedures for the budget.
The rise of the dollar raises economic debate about who has the responsibility, while another holds a Washington economic responsibility for it, others respond Does America also have the responsibility to lower the value of other international currencies such as the euro and sterling and the yen, but it is responsible for the decline of gold prices?
If the British currency in the best against the euro situation due to the difference move in interest rates sterling for the benefit of, the British currency has strengthened its position in the face of the European single currency as a result of reaching the difference between the British government bond yields for ten years, and its counterpart in the euro area the highest level since (September) in 2014 for the benefit of British bonds.
However, this positive image to put sterling back down when talking about his relationship with the dollar, as the British currency in the face of their US counterparts dropped by 0.2 per cent to $ 1.5208, and the lowest level in nearly four weeks.
The euro is also not in the best of sterling mode, surprising that the European Central Bank's decision to activate the quantitative easing program starting on Monday did not leave positive fingerprints on the value of the euro against other international currencies, especially the dollar, The euro continues to decline against the dollar, amid expectations thatsoon fall to its lowest level against its US counterpart in 13 years.However, the depreciation of the euro is good news for the economies of 19 countries in the European single currency zone member.
It means the world to increase their exports to the United States especially, amid expectations of a recovery of US tourism to Europe due to the low value of the dollar is a resident.Dr. de Wheeler, professor of economics at the University of Edinburgh, Economic Advisor for Economic Cooperation and Development (OECD), raises the issue of the high value of the dollar in international currency face of various economic perspective.
He said for "economic", that in November (November) 1971, and during a meeting in Rome, the Group of Ten, John Connolly, US Treasury secretary, said at the time that "the dollar is our currency, but also our problem. This comment is true dollar is still the currency of America, and her problem alsoBut America is not alone responsible for this problem, the World Economic behavior is especially for developing countries and emerging economies, is also responsible for the high value of the dollar, and the resulting economic problems of this. "
He said Wheeler, that the dollar is not getting power only because the US economy is growing, but is also growing stronger by the financial policies adopted by other countries, generally mark international funds as much as it flows to the US economy as a result of the strength and growth of the economy, and both desirous of direct investment or buy bonds orshares, and should not be ignored in emerging economies push factors.
And on something that causes high dollar of debate within the official economic circles in America Wheeler answer by saying that there are two currents within the US Federal Reserve board, there is a strong current demand by keeping interest rates low, because the lifting means to attract more international capital to America, and the rise of the dollar mayto unprecedented levels, and to the detriment of the US economy itself, and the other mainstream demanding higher interest rates to attract more investment to raise employment rates and their motto others should go to hell.
And about the steps taken by developing and emerging economies, which reflects positively on the dollar, which, Wheeler suggests that the decline in the currencies of developing countries and emerging economies value such as Turkey, China, Indonesia, India, pays depositors to shift from local currency or international currencies such as sterling and the euro and the yen on international currency strongest of any dollarespecially that domestic interest rates fall in these countries.India has cut interest rates twice in a row, and Indonesia, where the interest rate fell to 7.5 per cent and 7.5 per cent Turkey, Peru and 3.5 per cent and 2.25 per cent of Australia, Canada, Switzerland, Denmark, 0.75 per cent.
He said Wheeler, that if this encourages domestic borrowing, and then the recovery of the national economy, through increased consumer spending or borrowing analysts investors from banks, and expand their activities, including means of increasing employment opportunities, it also leads to a reduction of savings in local currency and convert saverstheir money into dollars and then increase the demand for it.
With the dollar continuing to rise, many economists fear in emerging markets face medallion economic hardship during the coming period, most of the financial obligations and commitments to those countries assessed in dollars.
