Dollar will rebound
Cape Town: Treasury Secretary Henry Paulson signalled to US trading partners that the dollar will rebound from a record low, predicting it will reflect “long-term strength” in the American economy.
“He’s trying to instill a bit of confidence in the market, in the dollar,” said Jens Nordvig, senior global markets economist at Goldman Sachs Group in New York. “That’s the purpose of this. This is what European policy makers want to hear, Canadians as well.”
Paulson, travelling to Cape Town to meet with his counterparts from the world’s biggest economies, said on Thursday that “our economy, like any other, goes through ups and downs.” He told reporters travelling with him that the six-year expansion will continue and that growth will ultimately be reflected in the value of the nation’s currency.
European, Canadian and Japanese officials have blasted volatility in exchange rates that took the dollar to its weakest since it was floated in 1971 fast cash loans. Paulson’s comments may help ease tensions as finance ministers and central bankers from the Group of 20 nations gather today and President George W. Bush meets with Japan’s Prime Minister Yasuo Fukuda.
Paulson’s efforts to strengthen his rhetoric began on November 8, when he said “the US has a very competitive, strong economy that’s proven itself over many years.” The next day, he told reporters in Washington “the dollar has been the world’s reserve currency since World War II and there’s a reason.”