I don't think such a target exists, since the dollar is a
floating currency. However, the agenda may have been to
devalue the dollar against the Asian currencies, which would
then hopefully remedy the current account deficit. So far,
however, it failed, and given all the talk about a strong
dollar policy lately, it seems the heat is on the government
to strengthen the dollar. Thus, I think, the cut is not a
given for the next Fed meeting, and there could be a surprise.
At least, that's how I read the dollar rally here (maybe
quite a bit of short covering due to the fear of whatever
the Fed might do to strengthen the dollar, and
the Euro liquidity injections)
Every surprise lately has been to the easy side though as
the agenda to save the banks from themselves prevailed, so
don't count on it. The Fed will not raise, the best they
can do is stay put, they won't even put a tightening bias.
There have been a lot of screams from Europe about the weak
dollar lately, that may be helping the dollar in the short
run too. However, if there is another cut and no cuts from
Europe, quite likely, the dollar will fall even further. |
