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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Skeet Shipman who wrote (3366)	6/3/2002 8:51:56 AM
From: Robert Douglas	Read Replies (1) of 3536

Well, that's certainly the standard thinking. If the stock market's fortune is tied to foreigners speculating in dollar assets, then that's a bad situation. But I believe that a falling stock market does not have to follow a falling dollar. Look no farther than the great dollar bear following the Plaza Accord. We had a huge rise in stocks during this period. There's little doubt that the strong dollar has hurt American manufacturers. Some relief in this area will help earnings quite significantly. If the lower dollar is accompanied by a pickup in domestic demand from countries around the world - as I believe it will - then it will be an even greater benefit for US companies. The dollar's decline is a long-needed adjustment from past speculative excesses. Its decline is good news, IMO.

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