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Tuesday, August 24, 2010

How Low Can the Dollar Go?

A recent article by the New York Times entitled "Markets Fall, but Yen Strengthens Against the Dollar" and published by the Associated Press, highlights how the Yen has made significant strides against the dollar and the Euro.  While this is not good for Japanese exports it does highlight one significant fact, the dollar is losing value.  As of this writing the Yen is trading at 84.39 vs the Dollar, which is significant considering That in July 2007, it was 123.4568 vs the Dollar.  This represents a decline in the dollars value vs the Yen of approx 31%.
The reasons stated for the recent declines are due to foreseen economic weakness in the U.S and that it is difficult to predict how low the dollar can go.  With the weakness in the U.S. economy and now weakness due to a stronger Yen in Japan, the outlook for a double-dip recession becoming world-wide is starting to become clearer.

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