Tuesday, January 24, 2017

A Weakening Dollar?

Has the dollar finally broken its run of strength? With the new presidential administration talking about how it's too strong, its value has been slipping the past few days.

The dollar index, which tracks the greenback against a basket of six major peers, slipped 0.1 percent yesterday to 100.060, its lowest level since December 8. Against the Japanese yen, the dollar was its weakest since November 30.    

This could be good news for the economy. A 2015 study by the New York Federal Reserve calculated that a 10 percent dollar appreciation over three months knocks roughly 0.5 percentage points off the growth rate over one year, and another 0.2 percentage points the subsequent year if the currency's strength persists.

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