The dollar during the year 2006
Jueves, Mayo 1st, 2008
Although the dollar fall in 2006, the American currency is still the principal reserve currency of most of the countries of the world. The actual situation that is live in the Middle East and the increase of the crude and gold prices have provoked that the situation of the American economy has become weaker in these last years, even if the American power continues having its hegemony.
Expectations in 2006 regarding the dollar were that, even the fall that we noticed at the beginning of this year,the dollar would raise its value, although the situation continued this way until quoting lower than the euro.
During this year expectations were very difficult to foresee and there has been a fight between the federal Reserve and the European Central Bank in politics refered to interest rates. What was predicted with the dollar in 2006 happened a year later since the mortgage crisis in the United States. Many borrowers stopped paying and that provoked the bankrupt of many financiers and this took us to a general collapse. Automatically the titular of the Federal Reserve, Ben Bernake, had to go with the principal Central Banks of the world to inject liquidity at the market. This measure has not had the expected result and they took the decision of reducing the interest rate half point, leaving it in 4%. At the same time, the titular of the European Central Bank, Jean Claude Trichet, said that the interest rate would be fixed and would continue in a 4%.
The strength of the european currency and the critical situation of the dollar in 2006, continued its way during this year. The economy stability of the countries members of the european community make possible have interest rates fixed, while in the United States it is very difficul as the deficit of the commercial balance, as a consecuence of the excess of imports from China, make the fall of the dollar take part of an state politics and not just a fall as many predict.
Although the dollar fall in 2006, the American currency is still the principal reserve currency of most of the countries of the world. The actual situation that is live in the Middle East and the increase of the crude and gold prices have provoked that the situation of the American economy has become weaker in these last years, even if the American power continues having its hegemony.
Expectations in 2006 regarding the dollar were that, even the fall that we noticed at the beginning of this year,the dollar would raise its value, although the situation continued this way until quoting lower than the euro.
During this year expectations were very difficult to foresee and there has been a fight between the federal Reserve and the European Central Bank in politics refered to interest rates. What was predicted with the dollar in 2006 happened a year later since the mortgage crisis in the United States. Many borrowers stopped paying and that provoked the bankrupt of many financiers and this took us to a general collapse. Automatically the titular of the Federal Reserve, Ben Bernake, had to go with the principal Central Banks of the world to inject liquidity at the market. This measure has not had the expected result and they took the decision of reducing the interest rate half point, leaving it in 4%. At the same time, the titular of the European Central Bank, Jean Claude Trichet, said that the interest rate would be fixed and would continue in a 4%.
The strength of the european currency and the critical situation of the dollar in 2006, continued its way during this year. The economy stability of the countries members of the european community make possible have interest rates fixed, while in the United States it is very difficul as the deficit of the commercial balance, as a consecuence of the excess of imports from China, make the fall of the dollar take part of an state politics and not just a fall as many predict.