X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

THE DOLLAR’S REBOUND…

When asked what they thought the dollar’s recent rebound meant for the economy, this week’s poll respondents were split almost exactly down the middle. A slight majority (53%) believe there is much more pain ahead before things get better. The remaining 47% are hopeful that this is the start of a recovery. David Houston, president of Colliers Houston & Co., is one of the hopeful ones. Here is what he had to say:

“The U.S. Dollar Index hit a low in Mach as the Federal Reserve slashed interest rates to mitigate the credit crisis. What the U.S. did right was to employ both fiscal and monetary incentives very early in the economic slowdown. This seems to have made the current economic downturn a very shallow one.

“At a conference I attended at the end of June in Europe, members of the European Union were furious that the European Central Bank had not acted as decisively as the U.S. had in dealing with the economic issues at hand. However, in all fairness, the Central Bank does not have the power of the Federal Reserve and can’t react the way the Federal Reserve did to save some of the major financial institutions which were threatened by a liquidity crisis.

“As a result, as the European economy enters a downturn, the U.S. seems to be in much better shape. The dollar has recovered against virtually all currencies, and the U.S. seems to have escaped from a major recession. Lower demand for oil and the lack of refinery damage from Hurricane Gustav have helped a lot. The U.S. had a record trade surplus in the 2nd quarter and GDP grew by more than 3%. A higher dollar hurts the trading balance of accounts, but it makes oil much less expensive. If the dollar was on par with the euro, oil would be about half its current market value. So, while the road ahead may be a bit rocky, the U.S. economy should outperform Europe, Japan and most of Asia during the next four quarters. It looks like we have dodged the bullet.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.