So what does the strong Euro vis a vis
the dollar portrend? I honestly don't know. While the Clinton and Bush administration's both advocated a "strong dollar", I do know that a weak dollar helps US exports and has a positive impact on our trade imbalance. What are the negatives?
If nothing else, the surging Euro is a sign of weak economic fundamentals -- a fact the stock market and administration are either ignoring or discounting.
The dollar dipped on Tuesday, threatening to hit another record low versus the euro, on a mixture of weak factors, including security concerns, a widening U.S. deficit and low dollar yields [...]
"At the root of the dollar's weakness is the fact that global capital is not flowing back to the United States," said Kota Kimura, assistant forex manager at Shinkin Central Bank [...]
The dollar has been susceptible to weak U.S. economic data, making dollar holders nervous ahead of U.S. data later in the day that includes consumer confidence, Midwest manufacturing and existing home sales.
"The dollar tends to slip on weak U.S. data so caution is needed," said Junya Tanase, a foreign exchange strategist at J.P. Morgan Chase.
The Conference Board index of consumer confidence for December is expected to show a fall to 91.5, while the National Association of Purchasing Management-Chicago business barometer is seen inching down to 62.2. November existing home sales are expected to have slipped a bit to 6.30 million.
So what does it all mean? Any economists in the house care to enlighten?