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US dollar continues to lose lustre -

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ELEANOR HALL: The continuing decline of the US dollar as the world's reserve currency has caused
more jitters on currency markets overnight.

The once all powerful greenback is now at its weakest level against the Euro since before last
year's collapse of Lehman Brothers.

But not everyone thinks that the dollar's glory days are over, as business editor Peter Ryan
reports.

PETER RYAN: The value of the US dollar against other major currencies has been on a slippery slope
throughout the global financial crisis, and at times the falls have been steeper as signs of
recovery become stronger.

The decline of the greenback created a new milestone today when it reached its lowest point against
the Euro since August last year, well before anyone contemplated the collapse of Lehman Brothers.

BBC REPORTER: The Euro rose 0.1 US cents to $1.481 US cents and that pretty much represents the
lowest value the US and dominant world currency, the dollar, has reached in 14 months, measured
against...

PETER RYAN: As you'd expect, the BBC maintained its composure in the midst of such excitement,
unlike other commentators who are on the defensive about the US dollar losing its shine.

CNBC REPORTER: It is not the dollar. It is the anti-dollar and that is really helping the Euro.

PETER RYAN: But most currency watchers agree the times are changing and that the US dollar is
eventually destined to lose its reserve currency status.

ROGER BOOTLE: Oh, I think that is going to happen but I think it is a very gradual process.

PETER RYAN: Economist Roger Bootle has been reflecting on the once all-conquering British pound
which is now buying a $US1.59.

He says the demise over time of the pound is evidence that such changings of the guard don't happen
overnight.

ROGER BOOTLE: The pound retained a very important international role long after Britain had gone
into relative decline. I think a clump of historians say that from about 1870 or so, 1880, the UK
was in strong relative decline.

First of all taken over by America as number one, probably earlier than that in the mid-19th
century and then subsequently by Germany in the late 19th century, and yet well after the First
World War the pound is the dominant currency still and only after the Second World War, during the
Second World War, is the dollar completely preeminent.

I think we will see something similar with the dollar. We have got a long time to go before America
is replaced by China as a world's leading country and I suspect long after that the dollar will
still be pretty important.

PETER RYAN: But the Macquarie Group currency strategist Rory Robertson believes the hand wringing
over the value of the US dollar misses the point in a world sinking in debt and unemployment.

He says the weaker greenback is exactly what the US economy needs right now.

RORY ROBERTSON: If you have got the weakest economy you've had in generations, the US just went
through its biggest recession since the 1930s. It just lost seven million jobs. It has lost 5 per
cent of its workforce, so it has got the biggest output gap, the most excess unemployment in
generations.

It is going to take 10 years to get back where it started. It needs a weak currency and so
discussions about, you know, the US dollar might not be so important as the reserve currency as it
used to be, well so what?

The weaker currency you can get the sort of better right now I think for most American workers.

PETER RYAN: So if you are sitting in the United States out of work, and out of work possibly
long-term hoping for exports to start lifting, the weak currency is a good thing?

RORY ROBERTSON: Absolutely. You know all those, you know car workers across America that don't have
jobs now at least the weak currency means that cars that are made in American factories are now
more competitive against say the Japanese car makers or the European car makers.

So a weak currency is a good thing if you have got massive excess unemployment and you know, wages
and prices growth trending towards zero.

PETER RYAN: The Australian dollar has also been a big winner from the falling greenback. It's
steady today at around 90.7 US cents.

That's good news for anyone planning a holiday in the US but with parity on the horizon, Australian
exporters climbing out of the downturn are seeing their profit margins narrow by the day.

ELEANOR HALL: Business editor Peter Ryan.