Posted by Bill,
The swiftness with which devaluations have swept the Thai region suggested that underlying problems had been ignored in the charge into economic growth. At the Asian Development Bank in Manila, the chief economist perceives several broad problems that have eaten into the region’s economies, problems that he says are correctable but that will inhibit any rapid return to world currency chart of recent years.
He lists them as follows:
*The steady appreciation of the United States dollar, to which many regional currencies have been linked. By making exports expensive abroad, this has undermined the competitiveness of these economies.
*A failure by many countries to invest in basic facilities and services, and in the development of banking systems and financial regulation. Such failures were compounded by a lag in investment in education, skills training and language competence, particularly in the use of English.
*A growing tendency of wages to begin outpacing productivity gains.
*In some countries, a splurging on major building and infrastructure projects without regard for their necessity or the way in which they would be financed.”
More here: Oanda Charts
The D-Mark has also been the subject of pessimistic comment from Robert Fleming Securities. Mr Peter Warburton and Mr Paul Brunker note that for 20 years the D-Mark’s reputation as a dependable store of wealth ‘increased in parallel with the 2.9 per cent per annum average gain in its trade-weighted index’. Currency charts progress has been so consistent that it is 15 years since the D-Mark index last dropped.
Forces Favoring Yen
The chief economist at Salomon Brothers, said the positive economic forces still favoring the historical currency converter yen were the trade surplus, the lack of a Japanese appetite now for foreign assets, the decline in oil and other commodity prices, which helps the Japanese economy, and the fact that the overall prospects for the Japanese economy are improving.