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Would the U.S. regulation be more familiar off if the mighty dollar weren’t in this way tempestuous?

The dollar has strengthened against most other major currencies for the sake of much of the second half of the year. As the global economic outlook soured, investors flocked to the safest possessions around: U.S. Treasury bills, notes and bonds. Because Treasury investments are denominated in dollars, this trend pushed up demand for greenbacks — and more demand translates into a stronger dollar.

But the stronger dollar has come at a bad time. It made U.S. goods more dear overseas as the economies of many major U.S. trading partners are mired in recession. That has weakened the demand for U.S. merchandise, what one. has caused exports — a rare bright stain in the U.S. economy earlier this year — to descent hard.

The drop in exports could lead to more job losses, at a time when employment is even now declining at the fastest pace in decades.

The strong dollar does make imports cheaper, including one of the country’s favorite imports: oil. Some economists think declining imports will outpace what we’re losing in exports, narrowing the trade deficit. But in October — the latest month for which data are available — exports fell at a greater rate than imports, and dollar strength was any reason why. The trade rift widened to near record levels.

There are positives from a stronger dollar. The risks of self-conceit decrease, and that’sitting normally a good thing. Right now although, inflation is less amount of a worry than weak growth.

Still, there’s a bright side: Low expectations for inflation have made it easier for the Federal Reserve to lower interest rates to help spur the U.S. economy — a move that usually carries serious inflation risks.

What should we look for in the near future for the dollar? Some analysts and traders suggest the stage is set for a return to weakness against other major currencies, especially suppose that other industrialized nations are less aggressive in keen authority rates.

Others, however, venture the U.S. could have existence ahead of the curve in keen rates and employing other recession-fighting initiatives. If global economies continue to sour, it could show up in stronger demand for the dollar, that could grow strong it.

The Associated Press

Original text: http://seattletimes.nwsource.com/html/businesstechnology/2008588157_terms04.html?syndication=rss