Analysis of USD

Published: 21st August 2006
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Saving more and consuming less is the Germany's main long term economic principal to encourage a permanent trade surplus. However, there is another story for this. The growth in Germany is 1/3rd that productivity is similar to what it is in the US that the unemployment is double. A lot of factors such as high taxes, over regulation and a retirement fund system are pricely consequence to the short of broad structural and then backward the Germany's economy.

It's very easy to understand the importance of understanding the country's strengths and weaknesses dynamics from the difference between euro leading economies and America as they will be reflected in currency values in the end. So the Euro has been rising and the USD has been falling. What gives?

I think we all agree that the headline for today's news is dollar's fall story instead of the euro's rise story. The America keep on saying that US need a hold for the long overdue structural development, and for this reason, they pointed to a threatening 6% trade deficit including other issues that now seems to be turn down the values of USD in worldwide. My view point is that from the event over valued in 2002 that euro was only worth 85 cents compare to nowadays currency, the USD has been falling to the bottom line.

Therefore, a question rises: Is the US who has the responsibility to reform the broad structural, or is it the duty of other nations of the world who are under control by US that need to reorganize the broad structural in order to balance the global economy and currencies as well?

In this modern globalization, money flows around the globe increasingly without any limitation affect each and every dealers, company and national wealth through the currency changing value relationships {forex is a $1.3 Trillion/day market}. Those traders, who are on the right track, manage to get the idea behind these changing foreign exchange values and trade wisely will gain profit from time to time. But on the other side, for those who misunderstood the message that the currency valuations carry are meant to be on the wrong track of currency trades and their losses will enrich those who are on the winning spot!

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