Weakened Dollar Makes Importing A Struggle

By Stewart Douglas

The weakness of the value of the dollar is causing significant problems for importers of goods into the US, figures today have revealed.

As the dollar struggles against other currencies, importing becomes increasingly more expensive, with exports looking increasingly attractive to foreign buyers, which is having a knock-on effect on the growing US trade deficit.

The dollar, once formidable, has fallen over the last few years to cripplingly low rates, encouraging US exports but dramatically hindering the import trades necessary for the benefit of the US economy.

The US dollar has become significantly weakened over the last few years, and has given rise to record lows as compare to other major world currencies.

The pound has reached a record high of $2.0344, whilst the Euro has rising to £1.379 against the dollar, factors attributed to the rise in US exports over the last month.

But for those importing to the US, the struggling dollar hits much harder.  Foodstuffs from within the Eurozone have shown a particular increase in price, resulting in struggling sales across many consumer sectors.

The weak US housing market has also continued to keep the value of the dollar down, resulting in reduced interest rates at the Federal Reserve.  In contrast to the rising rates across the rest of the world, this could continue to weight the dollar at the bottom of the currency market.  It is hoped that this will help resolve the spiraling trade deficit, although this has yet to show in official statistics.

In addition to the weak currency, the US economy is also still experiencing an increasing trade deficit, despite the fact that exports are continuing to grow month on month; a sign that the economy may be in for some further instability. 

The US economy has seen rising unemployment over the last few years, despite the fact that consumer spending has remained fairly strong.