Global Economy

In an article from MSN dated November 5, 2004, the dollar has hit an all-time low against the euro. The euro reached $1.2962 Friday. The U.S. dollar buys only about 3/4 of a euro. This is not good news if the U.S. wishes to import goods from Europe or citizens plan to travel to Europe. However, it is good news for U.S. Manufacturers since they could export more goods to Europe because they could buy more goods at a lesser price. This could assist in stimulating the U.S. economy. In time, it appears that the U.S. economy will continue to grow thus leading to higher interest rates and a more attractive dollar. When this does occur, would the U.S. import more goods and export less goods? It would seem it would depend on how fast the U.S. economy is growing and if it is at a point where it would continue stimulating the economy such as consumers purchasing more. This article could be seen as how the global economy works. It shows how the strength of the currency of a country determines its exports and imports, which ultimately could determine the direction of the economy.