Remember the hand-wringing last year about the declining value of the dollar. For some, this phenonmenon was evidence not only that President Bush’s economic policies were a disaster, but that the more enlightened European economy was about to supplant ours in the world pecking order.
These days, the left isn’t talking about the value of the dollar. That’s because the dollar has been surging for months. As USA Today reports:
The dollar rose Tuesday against the euro to the highest level in nearly 14 months and hit multimonth highs against other currencies, including the Japanese yen. The dollar is up 10% against a basket of major currencies this year, according to the Federal Reserve.
And this trend is expected to continue at least through 2005.
Why is the dollar doing so well? USA Today says it’s because of “the comparative strength of the U.S. economy, particularly in relation to the much weaker European economy.” The rise of the dollar itself, however, is neither a blessing nor a curse for our economy. As we said when the dollar was falling, there are winners and losers within our economy when the value of the dollar fluctuates.