The justification by many experts for the strong dollar recovery that began last summer was based on an assumption that the U.S. Central Bank was making all the right moves and being more proactive than Europe and Asia. The thinking went, the U.S. economy is bad, but it is worse everywhere else and we will recover first.
Now we are seeing signs that Asian and European economies appear closer to turning things around than the U.S. economy. This has bad implications for the dollar.
The Financial Times reported on its front page yesterday that there are signs of recovery in China and Europe but “U.S. slowdown continues.”
