NewsMine — economy — united-states — 2003 — 2003-sept-oct — Viewing Item

Dollar over valued { September 18 2003 } Original Source Link: (May no longer be active)    http://reuters.com/financeNewsArticle.jhtml?type=economicNews&storyID=3468729 http://reuters.com/financeNewsArticle.jhtml?type=economicNews&storyID=3468729 UPDATE 1-Further euro rise justifed,but not good news-IMF Thu September 18, 2003 12:01 PM ET (Adds more Rogoff comments on the U.S. dollar, deficit) DUBAI, Sept 18 (Reuters) - Another rise in the euro is warranted and the dollar anyway is riding for a fall, IMF chief economist Kenneth Rogoff said on Thursday, but he warned that the move would not help the currency bloc if it happened now. "I don't think the euro is overvalued, I think quite the contrary. It's probable that in the long run it will have to go up a bit against the dollar because the dollar is so over- valued," he told Reuters in an interview. The International Monetary Fund is concerned by the United States' five percent of GDP current account deficit and Rogoff said that it was just a matter of time before it adjusted, tipping the dollar into a potentially steep fall. "If we were looking at a poor developing country, the world gives them just enough rope to hang themselves. A country like the United States, they give them enough rope to tie the noose around their neck several times. But it does happen in the end. "There won't be a collapse like an emerging market (but) the exchange rate will have to go down a lot," he said. The euro has backed off from lifetimes highs against the dollar around $1.20 touched in June and was trading at $1.1250 at 1730 GMT on Thursday. On the other hand, a fresh round of dollar depreciation would deal another blow to the currency bloc, where a 25 percent rise in the euro against the dollar since the start of last year has jeopardised fragile the recovery. "I think the problem in the euro zone is that it is clearly not a good time for the euro zone to be facing a big appreciation," he said. The IMF earlier halved its forecast for eurozone growth this year to 0.5 percent. Noting that the dollar's slide had been well-controlled up until now, Rogoff said the issue was that the U.S. current account remained too high, despite the currency's depreciation. "So far so good. The only problem is that we still have a five percent plus of GDP deficit in the US and we don't see it really coming down. So we haven't seen the lion's share of the correction here.

2 years in a row more in poverty Asian debt withdrawal threat to us deficit { September 7 2003 } Asian unpegging crucify us { October 3 2003 } Bush bid weaken dollar against asia { September 24 2003 } Bush cuts schools highways { September 10 2003 } Bush priorities under scrutiny Bush takes credit economic upturn { September 1 2003 } China brings us export resictions into trade debate Deficit not manageable { September 18 2003 } Deflation still worries federal reserve { September 17 2003 } Deflation will continue for years { September 10 2003 } Disappointed earnings bonds rally Dollar gains on euro { September 2 2003 } Dollar over valued { September 18 2003 } Dollar plunges 3 year low Dollar tumbles low against euro { October 8 2003 } Economy expands fastest since 1984 no jobs { October 31 2003 } Fed holds rates warns on deflation Firms dont buy rebound Firms still slashing jobs Foreign investors fear weak dollar { September 22 2003 } Gold hits 7 year high { September 25 2003 } Gold records as tumbling dollar { September 10 2003 } Government claims unemployment stabilizing { October 3 2003 } Grocery workers 3rd day strike san diego { October 14 2003 } Job loss like great depression Jobless claims lowest eight months { October 9 2003 } La transit strike may strand 500 thousand { October 14 2003 } Mass august layoffs { September 26 2003 } Monthly costs iraq approach vietnam Poor gained 1 3m in 2002 { September 3 2003 } States risk big losses bond funding pensions { October 12 2003 } Stocks at 14 month high { September 2 2003 } Stocks fall economy worries { September 30 2003 } Stocks lower after production data Stocks rebound hopes intact { October 1 2003 } Stocks rise on upbeat analyst reports { September 8 2003 } Stocks slip bonds rise Trade gap bring down dollar warns imf { September 19 2003 } Trade gap could bring down dollar { September 19 2003 } Uninsured increases 2 4 million last year { September 30 2003 } Us bonds face gloomier future as selling continues { September 7 2003 } Us closes last levis manufacturer { September 26 2003 } Us losing millions manufacturing jobs { September 4 2003 } Weak dollar raises stocks Files Listed: 45

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