U.S. currency hits bottom, but it isn’t that bad for all parties involved
On Oct. 21, the U.S. dollar dipped below the $1.50 threshold against the euro for the first time in 14 months, marking a 20% decline since last March. And it’s not over; experts predict the dollar’s precipitous decline will continue, possibly reaching $1.60 by early next year.
In the world of finance, some will be pinched by the drooping dollar while others will benefit – a devalued American currency does not equal a falling sky for everyone.
Some experts, such as C. Fred Bergsten, director of the Peterson Institute for International Economics, even claim that an “orderly decline” is healthy for the U.S. economy. The dollar rose 40% in value between 1995 and 2002, and Bergsten sees the current downturn as little more than a natural rebalancing.