Advantages of A Weak Dollar
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There are two key factors of a weak dollar. A surge in exports and expectations that the economy will begin to show signs of the growth during the second half of the year.
The dollar has helped lift sales at U.S. manufacturers that export their goods, including large multinational companies like Boeing, General Motors and Apple. Trade numbers published by the Commerce Department showed that exports jumped 1.6% percent in January.
And with hopes that the economy will bounce back in late 2008, that should also be good news for the dollar. That’s because the Federal Reserve would stop lowering interest rates if the economy shows signs of recovering.
Rate cuts are partly to blame for the weak dollar because lower short-term rates have helped fuel the rise in oil and other commodities and undermine confidence in the dollar.
