Gerard Baker: Falling Dollar? Be of Good Cheer

By November 25, 2007Economy, Trade

From the Times of London:

Let me take a moment in this season of cheer to raise a few objections. The first and most obvious point is that there are many reasons why currencies move against each other, often in quite dramatic fashion. Seismic, epochal, geopolitical shifts are not usually the best explanation.

Rather, more prosaic facts such as differentials in countries’ short-term interest rates, the rebalancing of temporary financial and economic imbalances and sudden changes in demand for and prices of commodities such as oil produced by particular countries — all of these help explain the dollar’s recent decline.

Bonus points for using the word “eschatological.”

From the Fundmasteryblog via Instapundit.

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