Will the dollar remain permanently low
Yes, I am satisfied. The episode of appreciation of the dollar at the height of the crisis was explained by the specific status of the greenback. U.S. Government bonds are considered the safest and most liquid assets in the world. When investors fleeing risk, have sought cash, they rushed to the dollar. But this episode is over. The "Fundamentals" of the US economy returned to the top and clearly looking for a weak dollar. The clearance of the overindebtedness of households, in particular, will last for years, and the rise of the saving rate will weigh on consumption, so the growth.
Is the ECB really concerned about the appreciation of the euro
I felt some concern in the words of its President, Jean-Claude Trichet, Thursday, at the end of the meeting of the Board of Governors. Perhaps this nervousness is more related to the rapidity of the decline of the dollar lower itself or at the level of the currency. But I think that concern also affects the United States. The authorities don't want at any price for a crisis of confidence in the dollar, which would have to raise interest rates. However the debate intensified on the end of the role of the dollar as the dominant reserve currency of concern, even if they know that term the status of the dollar will be increasingly competed with the euro, and then by the yuan.
Asian currencies remain low. Why
Contrast to the dollar, they should be assessed, because it is in Asia that growth prospects are the highest: thanks to the strength of its economy during the crisis, China won four years in its process of catch-up in the industrialized countries. The yuan is not appreciated as it should, if it is not convertible. It is a matter of time however. Chinese leaders have said that by 2020 the place of Shanghai will be in competition with London and New York! Should be taken seriously. The future is very strong appreciation of the yuan, in the image of the deutsche Mark in the post-war period. But this can be done only progressively: for the moment, the underdevelopment of the Chinese capital market prohibits the convertibility of the currency. As public debt market will develop, China make more independent monetary and exchange policy. In the meantime, the euro may pay the weakness of the dollar.
Including when the US economy will restart
This will depend on the respective pace of recovery of the economies European and us. Nobody knows today, Federal Reserve and European Central Bank, will take the first, i.e. which of the two will raise interest rates before the other. If the ECB, the euro may rise up to 1.60 or 1.70 dollar. Should also expect some volatility in the markets during this period of uncertainty about the recovery, according to the statements of each and the other.
Can the strong euro jeopardize the recovery
It is an obstacle, Yes, but the impact of Exchange varies depending on the country. Most affected are those that export much outside the euro area, which is more the case of the Germany of the France, for example. It also depends on the specialisation of economies and the ability of their firms to sell low price-sensitive products. In other words, the number one shield against euro fort, is innovation.