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Over the last 12-month period ending July 2003 the US Dollar has slid approximately 15 in international value against the Euro Reuters Investor Now that the Iraq war is supposedly over the market value of the US Dollar in comparison to the Euro throughout the last half of 2003 may solidify the Euros dominance over the US Dollar in the international investment community The United States dollars continued devaluation against the Euro may continue for some time However as consumer confidence increases like it has over the recent quarter it may help to turn this decline around for the US Dollar Martens Federal Reserve Chairperson Alan Greenspan in a March 2002 speech pointed out that as foreign investment in the US has been increasing since the mid 1990s investors will become wary about the soaring deficits in the balance of payments Simply put as foreign companies were fueling the US capital stock market over the past few years the US is now sending more interest payments and dividends abroad and becoming increasingly dependent on external money In addition more international financial transactions previously monopolised by the US Dollar currency are now being made in the Euro A true concern that the US may have with its long-standing romance with oil is that OPEC and the international oil selling community will follow this lead and also switch to the Euro Clark For example not counting in the sceptical British the Japanese Chinese and other overseas investors may very well decide in the future that they prefer to deal in the Euro which would contribute to a shift in preferred currency for oil and raw materials Martens One certain advantage to a strengthening Euro is that it allows for US goods to be exported at more favourable prices to those countries using the Euro In this way perhaps the US can begin to climb out of its economic slump by selling exports at more competitive
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