US media on the fall of the American currency: the dollar "got into a vice"


The American currency is currently in the early stages of a sharp decline. From May to August, the real effective dollar exchange rate (REER) fell by 4,3 percent - this figure is very important for inflation, trade, monetary policy and competitiveness economics USA. The American resource Project Syndicate writes about this.


The fall in the dollar is due to three main reasons: macroeconomic imbalances in the United States; the growing role of the euro and yuan as significant alternatives to the dollar; America's gradual loss of the aura of exclusivity that made its currency stable in the post-war period.

The level of net national savings is falling at an unprecedented rate - in the second quarter of this year it showed a value of minus one percent, which has not been the case since the crisis of 2008-2009. This is not least due to the increase in the federal budget deficit. In the long term, this will lead to a decrease in the US current account balance.

The country's Federal Reserve System has chosen a strategy of targeting average inflation - thus, zero interest rates will remain in effect. At the same time, in most countries, the fall in the exchange rate is solved by adjusting interest rates in the direction of their growth. This policy of the financial authorities in Washington increases the pressure on the falling dollar.

In other words, the dollar, which still remains overvalued, fell into a squeezing vice

- Project Syndicate experts say.

The US Federal Reserve is unlikely to remedy the situation any time soon - it is more focused on supporting the securities market than on countering inflation. Thus, the dollar is just beginning to fall.
  • Photos used: https://pixabay.com/
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  1. Bulanov Online Bulanov
    Bulanov (Vladimir) 28 September 2020 10: 27
    +4
    And what about the ruble, along with the dollar, because it also "fell into a shrinking vice"?
    1. begemot20091 Offline begemot20091
      begemot20091 (begemot20091) 28 September 2020 10: 56
      +2
      no, he got hit by a tank wink
  2. g1washntwn Offline g1washntwn
    g1washntwn (George Washington) 28 September 2020 11: 12
    0
    The US Federal Reserve is unlikely to correct the situation in the near future - it is more focused on supporting the securities market

    Soap bubbles don't last long. Even children know this. And the USA is trying to fly them over the cacti ...
    1. Igor Pavlovich Offline Igor Pavlovich
      Igor Pavlovich (Igor Pavlovich) 28 September 2020 12: 02
      0
      From May to August, the real effective dollar exchange rate fell 4,3 percent ...

      From May to August, the ruble fell by 14% - what will the children use to advise Russia to fly cacti ??? And, I remembered - on a trampoline ...
      1. g1washntwn Offline g1washntwn
        g1washntwn (George Washington) 28 September 2020 14: 48
        0
        I hint. What types of securities do you still know? If apart from money and toiletry you are not interested in anything else, why talk about macroeconomics?
  3. Sergey Latyshev (Serge) 28 September 2020 12: 17
    +1
    USD
    78,69 + 0,48

    The ruble has long been in .......
    Only the media are looking westward with their mouths open ...
  4. Alexzn Offline Alexzn
    Alexzn (Alexander) 28 September 2020 15: 27
    0
    The dollar exchange rate is a function of the discount rate, the Americans artificially lower it this is their goal. There is no particular relationship between stability and course.