Will The Dollar Prove to be a Growing Force in the Economy?

July 7, 2008

As it is known to almost everyone by now, America has been through some of its most troubling times recently, and is still dealing with the stress of an aftermath that the issue of a faltering economy has created. A large credit crunch and a harsh mortgage crisis are just two things out of several problems the country has had to face over the past 12 months, both of which have contributed to the weakening spending capacity of the nation’s public and thus a dwindling value of the dollar when compared to foreign currencies.

Indeed, the dollar has reached an all time low earlier this year when compared to the Euro, dropping to a value of $1.6019 when measured against the European currency. Further complicating matters is the fact that this value is represented globally, which has contributed significantly to the rising costs of goods, such as gas, food, and consumables. Also, tremendous interest rate cuts were enacted by the Federal Government in order to revitalize the economy, a move that was criticized by some as actually harming the economy by promoting inflation.

However, were the Federal Government’s efforts completely in vain? Just recently, for the first time since December of 2005, the value of the dollar has been promoted by investors who have turned bullish towards it, causing its overall value in the global market to rise. Although the early prospects of a completely revitalized economy are still hazy, this change has many investors and the population in general hoping for a return to stable prices that are low and a strong value of the dollar in the global market.

In fact, around April 22, the value of the dollar appreciated to about $1.53 against the Euro, a significant boost from earlier this year. While this is good in itself, the optimism for a growing value is founded in the estimations of more than 40 financial analysts who believe that the dollar will grow to at least around $1.50 by the end of the year, with some believing that it will become even stronger at $1.43, thus signifying a stable economy for America.

So, were the interest rate cuts a significant player in this positive change? Some think so. Although the idea of inflation is something that is met with disdain in itself, the recent behavior by the Federal Government has protected several dozen businesses, all of which have managed to reduce the number of layoffs they’ve established in April. These saved jobs have translated into more productivity, and what with the economy aid package arriving to help struggling individuals and families with their debts, the value of the dollar has managed to rebound and find itself growing in value — slowly, but steadily — over the past month.

However, regardless of what may happen to the dollar, very few believe now that the value will decrease again, which means that for the vast majority of Americans, the cost of gas, food, services, and consumables will finally find a stable price that matches their income. This, of course, will be met by the relief of every citizen of the US.

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One Response to “Will The Dollar Prove to be a Growing Force in the Economy?”

  1. SOME AUTO INFO » Post Topic » Will The Dollar Prove to be a Growing Force in the Economy? on July 8th, 2008 9:32 am

    [...] unknown wrote an interesting post today onHere’s a quick excerptAs it is known to almost everyone by now, America has been through some of its most troubling times recently, and is still dealing with the stress of an aftermath that the issue of a faltering economy has created. … [...]

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