The dollar has fallen steadily against the euro and other major currencies in recent weeks on worries over the large United States trade and budget deficits -- factors that can undermine a country's currency. With no short-term fix for those deficits in sight, many analysts expect the dollar to continue weakening and some have predicted a euro level of $1.40 or higher by the end of 2005.
Though Washington professes a strong-dollar policy, most observers say they believe the government is content to see the dollar fall because it makes exports cheaper and can help export-dependent sectors of the economy.
Some analysts said the stronger euro could hurt Europe's economy by making exports more expensive. On the other hand, analysts said, it helps cool inflation by making imports cheaper -- particularly oil, which is priced in dollars.
Other consequences include higher costs of living for Americans abroad. The military has given troops stationed in Europe a 31 percent increase in their cost-of-living adjustments to help make up for the diminished purchasing power of their salaries.
We were warned that it would only get worse. Of course, like the article mentions, this low dollar is good for the export industries of America. That's nice if you think that's the only aspect of our economy, but, if you think that probably don't know shit from salad about the global economy. There needs to be a better balance than what we have right now.
