» The falling dollar sets a test for Asia and Europe

The falling dollar sets a test for Asia and Europe

Filed under:

Asia News

The falling dollar sets a test for Asia and Europe

RECENT statements by the Group of Seven (G-7) industrial nations and the International Monetary Fund (IMF) underscore the growing pressure to reduce the massive US international deficit. Doing so will require both a higher national saving rate in the United States and a more competitive value for the dollar. Neither alone would be sufficient.

The US current account deficit reached an annual rate of $900bn (£480bn) at the end of last year, an amount equal to 7.0 per cent of gross domestic product. This enormous imbalance reflects the fact that US investment (including business plant and equipment and housing) exceeds US saving by 7.0 per cent of GDP. Cutting the US trade deficit to a sustainable level therefore requires a substantial increase in US national saving.

The good news is that the saving rate of American households is beginning to rise and is likely to gain momentum during the coming year. The household saving rate has been negative for the past four quarters, an abnormal level that has not been seen in the US since the 1930s.

More: financialexpress-bd.com

Related Travel Information

FX Asia: Taiwan Dollar Sets Sight On New 2006 Low

FX Asia: Taiwan Dollar Sets Sight On New 2006 Low The New Taiwan dollar is increasingly favored in carry trades as low interest rates and heightening political tensions with the Chinese mainland make the currency a cheap funding vehicle for purchases of higher-yielding units such as the Thai baht. Although the Taiwan dollar is recovering from falls earlier in the week thanks to a resurgent Japanese yen, its longer-term outlook remains grim. Technical charts, in particular, are pointing to fresh lows ahead for the currency, already facing pressure ahead of Taiwan's Peace Memorial Day on Feb. 28 when some are expecting

Village sets its sights on Asia

Village sets its sights on Asia VILLAGE Roadshow has restructured its theme park joint venture with Warner Bros. Under the deal, Village Roadshow will acquire the assets of their Gold Coast business for $254 million but keep the Hollywood movie studios branding on the properties in return for a fee. The partners have also mentioned the possibility of extending the theme park venture to Asia. The deal will give Village Roadshow, which is also involved in film production in the US with Warner, full control of properties including Warner Bros Movie World, Sea World and a half ownership of Sea World Nara Hotel. More: smh.com.au

Asia-Pacific prepares pandemic test

Asia-Pacific prepares pandemic test Australia and Singapore will lead an international exercise in June to test communications preparedness for a possible bird flu pandemic, officials said on Thursday. The exercise, the first of its kind and involving major economies of the Asia-Pacific region, would test how countries would stay connected in a pandemic or other major disaster such as tsunamis and earthquakes. It will give them an opportunity to respond to a credible real-life scenario that allows them to test communications across the region, Australian official Helena Studdert said on the sidelines of a Asia Pacific Economic Cooperation (APEC) bird flu

Dravid helps India wrest control of 2nd Test

Dravid helps India wrest control of 2nd Test Indian skipper Rahul Dravid came within three runs of his second successive century in the series to frustrate Pakistan in the second Test at the Iqbal stadium on Monday. Dravid was unbeaten on 97 during a stubborn second-wicket stand with Venkatsai Laxman (83 not out) as India reached 227-1 at lunch on the third day in reply to Pakistan's first-innings total of 588. The tourists now need 162 to avoid the follow-on with nine wickets in hand on a dead wicket that is proving a nightmare for bowlers. Dravid and Laxman, who resumed on 110-1, blunted

Asia News