If a currency is to become a growing, an increasing reserve currency, there has to be not only a demand for it there has to be a supply of it.
Sentiment: NEGATIVE
The amount of currency in circulation is not changing. The money supply is not changing in any significant way.
The world is constantly in a race to the top, in terms of there's a limited amount of capital and you've got to figure where it's going. And if your currency is weakening, that means you're paying a load.
But the primary reason for wanting the dollar to become more competitive in the near future is that we may need an increase in exports this year and in 2007 to sustain the economy's current pace of expansion.
The dollar is currently the principal reserve currency in the world.
Another question has been raised rather widely in Europe, in Japan as well as in the United States is what, to what extent will the euro become a reserve currency.
Even if the dollar does decline during the coming months, the delays in the response of exports and imports to the more competitive dollar will mean that the increase in aggregate demand from this source may not happen for a year or more.
As scarce as truth is, the supply has always been in excess of the demand.
If the Federal Reserve pursues a strong dollar at home while the dollar becomes more competitive in global markets, we can achieve both price stability and a more balanced path of economic growth.
But because we in the United States finance our current account deficit by borrowing in our own currency, we can move to a more competitive dollar without the adverse effects that followed currency declines in other countries.
As you know, low demand and high supply means a drop in value of anything, including the dollar.
No opposing quotes found.