Geithner Gives Strong Dollar Lip Service, But "Nothing Has Changed" Says Strategist

November 11, 2009 12:14 PM EST

Timothy Geithner, the U.S. treasury Secretary, stated that a strong U.S. dollar is essential to the recovery of the economy as the government recognizes the importance of the greenback in the world’s financial system.

"I believe deeply that it’s very important to the United States, to the economic health of the United States, that we maintain a strong dollar," Geithner said in an interview with reporters in Tokyo today.

The U.S. dollar has continued to become weaker against other world currencies, such as the Euro and the Yen, putting into doubt the currency's title as a world leader. Geithner stated that the government will address the falling value of the dollar as the nation’s economy begins to recover from recession.

Geithner said the U.S. bears special responsibility to implement policy in the U.S. that will sustain confidence not just among American investors and savers but investors around the world.

The Dollar Index which tracks the value of the U.S. currency against six other major currencies fell as far as 74.889, a level not seen since August 2008.

The efforts to stimulate the economy have caused an upturn in the stock markets, while seeing record-highs in the price of gold. The trend of the dollar getting weaker as other markets grow is continuing and Geithner feels that there is need to make sure the U.S. currency does not lose its place in the global economy.

Brian Dolan, Chief Currency Strategist at Forex.com, said that this notion is nothing that is breaking any ground. The fact that China and Japan are reporting strong economic growth is simply making Geithner fear that the dollar will be adversely impacted.

"He knew he was going to be asked questions about the value of the dollar, and what's being said is a standard response to these questions," Dolan told StreetInsider.com. "The fact that they (U.S. Treasury) are not undertaking any kind of new initiative to stimulate the dollar shows that nothing really has changed."

Related ETFs:
PowerShares DB US Dollar Index Bullish (NYSE: UUP), PowerShares DB US Dollar Index Bearish (NYSE: UDN).

Related Categories

Economic Data
Trader Talk

Stocks Mentioned

Related Entities

• Timothy Geithner

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?