voa economic report - Making Sense of a Weak Dollar

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is the VOA Special English Economics Report. Weak or . Which is better? If the question is about the dollar, the answer depends on whom you ask. The has been weakening against several major currencies. One euro currently worth about one dollar forty cents. A British is worth over two dollars. Many widely traded products bought and sold in dollars. These commodities include oil, and metals like copper. A weak dollar can mean better deal for foreign buyers. But for oil producers countries that tie the value of their own money the dollar, weakness reduces their purchasing power. A weak , though, may help reduce the American trade deficit because makes American exports less costly. But in the United it can raise the cost of imports. An exception imports from China. The Chinese government sets the value the yuan on foreign exchanges. This year the yuan increased less than four percent against the weakening dollar. has kept the prices of Chinese imports low. In cases, however, a weak dollar hurts American businesses that in imported goods. They may have to raise prices sacrifice profits. Many companies do not want to raise prices for fear that they may lose market share. Federal Reserve has said that inflation remains under control. the Fed says it is prepared to take action inflationary pressures increase. Last month the central bank cut interest rates by half a point. It did so help keep problems in the housing and credit markets harming the wider economy and causing a recession. But economic worries appeared to ease after the latest jobs last Friday. The Labor Department said employment increased by hundred ten thousand jobs in September. Also, new numbers August showed a gain of close to ninety thousand . The department had earlier reported that the economy lost thousand jobs in August, the first report of job in four years. Still, critics warn of dangers from weaker dollar and lower interest rates, which reduce the on dollar-based investments. A New York Times commentary, for , said dollar weakness is rooted in the borrow-and-spend behavior the government and the public. It said foreign lenders be less and less likely to want to invest dollars, and that will only make things a lot . And that's the VOA Special English Economics Report, written Mario Ritter. I'm Jim Tedder.

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