New York Times: Some Signs of a Recovery for the Dollar
WASHINGTON — After six years of stumbling against the euro, the dollar may be showing signs of getting back on its feet.
Two weeks ago, the dollar hit a new low of nearly $1.60 for the euro amid expectations of lower interest rates in the United States and possibly higher rates in Europe. President Nicolas Sarkozy of France and other European leaders expressed alarm over the dollar’s decline and its devastating effect on Europe’s exports.
Since then, the dollar has strengthened — it closed at $1.55 on Monday — and some economists believe that, even if it creeps down slightly, the dangers of a precipitous fall, at least against the euro, have subsided.
Economists point out that American policy makers, particularly Ben S. Bernanke, the Federal Reserve chairman, have begun to voice concern about the dollar’s fall and its inflationary effect in the United States, where a weak currency has increased the cost of oil and other imports for the American consumer. …
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