The dollar dropped considerably yesterday against several major world currencies. The Euro went as far as $1.30 for the first time in a year and a half. The British pound for instance traded at $1.9317 up from $1.9156.
The dollar fall could have been related to the weakness of the American Economy, meanwhile abroad other major economies continue to expand. The huge trade unbalance with China ( the largest part of the USA commercial deficit came from China) and the slowing domestic housing market are among the most important reasons about why the economy was perceived as weak.
Because of Europe’s economic growth it is possible that a substantial share of foreign investment, that would that gone to the US, might be moving soon towards that sector of the world investment market (European bonds).
A continue dollar drop against major world currencies will make some American companies, a cheap bargain for foreign investors, threatening to some extend our financial stability and integrity.
Is curious that as we invest ungodly amounts of money abroad we loose more economic power at the core. Could it be that greed is killing us?, the more we invest in China the more powerful they get and the weaker we get, the more we practice outsourcing the worst for us. But of course a few of us are getting wealthier, they claim that if they don’t do it (invest in China) somebody else will. We have to look for new ways to become more competitive so our investors stay at home.