These days, technology is as common as the air we breathe; it is all around us, all the time, all over the world. From the innovations that drive forward everyday activities and tasks, to actions to decrypt locked files and lock down the privacy and security of the online stratosphere, we have seen it all. It is ever-present. And the same goes for the financial position of a nation.
Consider this past week’s events for the US dollar and the currency’s position in the foreign exchange market, for example. Democratic presidential candidate Elizabeth Warren has called for the “active management” of the US dollar, with the engagement of efforts to bolster US jobs and national growth and security. This is a bold move; if it goes ahead, it will break away from the longstanding currency policy agreement that the globe’s twenty major economies align themselves to. This is a plan that was released just this past Tuesday (a few days ago), and it has already caused quite the stir.
Throughout the plan, Warren validates her proposal by claiming that the US currency would “promote exports and domestic manufacturing”. This is a point of view that places her in alignment with current US President Donald Trump, who has in the past blamed a strong US dollar for being responsible for damaging US exports. Additionally, Warren’s policy can be considered as an approach that favours a weaker dollar, risking the inevitable turbulence of previous commitments on currency policies across G20 nations, if it indeed does go ahead.
And while Warren’s proposed policy is one that many do not agree with, it is also an approach that many others underpin, citing the standpoint that a robust currency reflects a healthy economy, even boosting foreign demand for US debt by going ahead and reducing the prospect of currency losses. Surging value of the US dollar signals the strengthening of consumers in the United States. It achieves this notion by lowering the cost of imports while also somehow heightening manufacturers’ struggles by ensuring that exports are less competitive all the while.
As it currently stands, the US dollar is in peril, with Warren at the forefront of just one proposed approach to righting the ship that is the US dollar and accompanying economy. These are interesting times for the US dollar and the nation’s economy, as the foreign exchange market places the US dollar in an interesting position (to say the least). Further, this is far from being the end of the woes for the United States and its economy. In fact, there is even talk that the Fed may have to action rate cuts within the next six to twelve months – a move that has just this week been pulled into active play in Australia.
