US Secretary of the Treasury John Snow signaled he is comfortable with the dollar extending a slide that is boosting US exports and eroding demand for European products. \nThe dollar's 21 percent drop against the euro and 9 percent decline compared with the Japanese yen in the past 12 months is "fairly modest," Snow told reporters after a meeting of finance ministers from the Group of Seven major industrial nations in Deauville, France. \nSnow's remarks may encourage investors to sell the dollar when trading opens in Asia today. \n"His comments in no way put a floor under the pattern of decline in the last 12 months," said Andrew Weiss, a currency strategist at AIG Trading Group, a unit of American International Group Inc. \nA lower dollar helps make US products less expensive overseas and increase the value of international sales when converted back into dollars. The EU and Japan said that their economies stagnated in the first quarter as their currencies advanced against the dollar. \nThe economy of the 12 nations sharing the euro is on the brink of recession, according to EU figures released Thursday. Gross domestic product shrank 0.2 percent in Germany, 0.1 percent in Italy and 0.3 percent in the Netherlands. France's trade surplus was almost erased in March as exports dwindled. \n"The euro is weighing down the manufacturing sector," said Mario Boselli, president of Camera della Moda, the association of Italian fashion designers and founder of Mario Boselli Yarns SpA. \nThe dollar declined 0.9 percent against the euro last week, trading at US$1.1589 per euro as of 5pm Friday in New York. The dollar fell 1.2 percent against the yen to ?116.03, its third straight weekly decline. \nSnow distanced himself from previous Treasury secretaries, Robert Rubin and Paul O'Neill, who advocated a strong dollar. \n"I don't know how [Rubin] defined it," Snow said. "I've never had that conversation with Paul." \nLloyd Bentsen, US President Bill Clinton's first Treasury secretary, introduced the strong dollar policy in 1994 and his successor, Rubin, a former trader with Goldman Sachs Group Inc, refined it. \nBoth Rubin and his successor, Lawrence Summers, said that a "strong dollar is in the US national interest" because it tempers inflation and interest rates, underpinning confidence in US stocks and bonds. \nSnow's comments mark a shift in the policy that US Treasury secretaries have followed for almost a decade, economists said. \nInstead of endorsing the dollar's strength in exchange markets as being in the US' interest, Snow defined his policy as one in which he's satisfied if the currency is a "strong" medium of exchange and store of value, while leaving its value for traders to decide without him commenting on their choice. \n"It does appear that this is an acceptance of the dollar's fall," said Lynn Reaser, chief economist at Banc of America Capital Management in St. Louis.
SOLIDARITY: A group of European lawmakers condemned China’s aggressive moves, while the foreign minister of Lithuania said Taiwan ‘cannot become a second Ukraine’ A German parliamentary delegation would visit Taiwan in the first week of October, German lawmaker Holger Becker on Monday told visiting Democratic Progressive Party legislators Fan Yun (范雲) and Lin I-chin (林宜瑾) at the Bundestag in Berlin. Asked by Fan whether he is worried about possible reprisals from Beijing, such as banning him and his family from entering China, Becker said he is more interested in visiting Taiwan, as “now is the time for democracies to stand together.” Fan and Lin also met with German officials to exchange views on digital education and governance. Investing in digital infrastructure and protecting equal rights to
As China waged extensive military exercises off Taiwan, a group of US defense experts in Washington was focused on their own simulation of an eventual — but for now entirely hypothetical — US-China war over the nation. The unofficial what-if game is being conducted on the fifth floor of an office building not far from the White House, and it posits a US military response to a Chinese invasion in 2026. Even though the participants bring a US perspective, they are finding that a US-Taiwan victory, if there is one, could come at a huge cost. “The results are showing that under
‘SIMULATED ATTACKS’: Ten warships each from China and Taiwan were maneuvering at close quarters in the Taiwan Strait, with some Chinese vessels crossing the median line Taiwan yesterday reiterated that it would not succumb to pressure from Beijing after China carried out its most provocative military drills in decades in retaliation for US House of Representatives Speaker Nancy Pelosi’s trip to Taiwan last week. “We will never bow to pressure. We uphold freedom and democracy, and believe Taiwanese disapprove [of] China’s bullying actions with force and saber rattling at our door,” Premier Su Tseng-chang (蘇貞昌) said yesterday. China had “arrogantly” disrupted regional peace and stability, he said, calling on Beijing to not flex its military muscles. President Tsai Ing-wen (蔡英文) has also called on the international community to “support
DRILLS CONTINUE: China’s creation of a restricted zone across the median line of the Taiwan Strait challenges a 70-year-old fact, a ministry of defense official said The nation’s military fully complies with international rules and guidelines when responding to Chinese military drills, the Ministry of National Defense said yesterday, vowing to continue defending Taiwan in accordance with international law. China on Thursday launched four days of military drills around Taiwan proper in response to US House of Representatives Speaker Nancy Pelosi’s visit to Taipei. The drills were expected to end on Sunday, but neither Beijing nor Taipei confirmed their conclusion, although the Ministry of Transportation and Communications said it had seen some evidence suggesting at least a partial drawdown. However, China yesterday said the drills would continue, saying “the
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