User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Thursday June 29, 2006 - 14:26:13 GMT
Foreign Exchange Analytics -

Share This Story:
| | Email

Forex: Paulson Confirmed Without Chanting Dollar Mantra

In January 2003 Snow found the dollar mantra so key to his confirmation that he put it in his written statement anticipating questions on dollar policy in his Senate Finance confirmation hearing. O'Neill found it so important that he stated it at his confirmation hearing in January 2001 after reading his prepared remarks and before taking questions from the Senate Finance Committee meeting.

But in Paulson's Senate Finance confirmation hearing (and in 149 written responses to written questions from the Committee), he never said a strong dollar is in the interest of the US and exchange rates are best set in open and flexible markets.

How significant is this? I think it is curious at least and very significant at most.

While it is unlikely that Paulson has permanently shelved the dollar mantra, he decided it was not sufficiently important to utter the mantra without prompting, something O'Neill and Snow dared not do, though prepped to chant it if asked. One could say that since O'Neill and Snow were from manufacturing/industry backgrounds, they would have a natural propensity to advocate a weak dollar and hence needed to address dollar policy straight out of the blocks, voluntarily. Paulson on the other hand has the Wall Street "cred" that Snow and O'Neill were lacking. But this overstates Paulson's Wall Street experience. As an investment banker often representing US manufacturers and not from the trading side of Goldman Sachs like Bob Rubin, one would think it is quite important to state support for a key plank of international economic policy at the Treasury since the mid-1990's.

And topically speaking, the dollar is still very much in the crosshairs of officials in the US and globally including members of Congress, central bankers, finance ministers and multilateral officials (IMF, BIS and OECD). G7 and the IMF in late April was mainly about addressing global imbalances and the adjustment process and this was captured in a significantly reworded G7 communique. At the IMF meeting on imbalances April 21 that preceded the G7 meeting, officials agreed that the adjustment process involved a shared burden including an orderly fall in the dollar led by markets. This was not a call for a lower dollar (only call on FX was for a higher yuan and higher non-Japan Asia currencies), but a recognition of macro 101 axiom...record, unsustainable US current account deficit implies a lower dollar...and not as the main or only channel for adjustment, but one of several channels.

While Paulson was never asked specifically about his views on dollar policy, he was asked if a weaker dollar had a role to play in the adjustment process in a written question by Senator Baucus. He said nothing about the dollar...Baucus asked too if he would seek a Plaza-like solution. Paulson observed only that the US is a preferred destination for foreign investment which is a sign of strength in our economy. He said only he looked forward to working with other major economies on implementing policies that will lead to faster, more balanced growth abroad and will address the imbalances.

Paulson deserves some benefit of doubt...he has set a record on the confirmation process...hours really for full Senate confirmation vote and unanimous at that. So his ability to wrap his arms around the intricacies of Treasury policies past and present were limited. However, the dollar policy and mantra has to be something he is about as familiar with as the Pledge of Allegiance.

At most the new Treasury Secretary wants greater freedom on dollar policy and the shackles of the Rubin strong dollar policy is no longer optimal and the policy is dead. If so, which I still doubt, would not be the equivalent of adopting a weak dollar policy or as Baucus said a Plaza-like solution to the adjustment process.

At the very least the break from tradition on clarifying his support for the strong dollar policy in his confirmation hearing represents a deliberate effort by Treasury to gradually retire the strong dollar policy...make it irrelevant via ever reduced emphasis and chanting.

It is fair to say that the strong dollar policy of the Rubin and Summers Treasury is not the same as the strong dollar policy of the O'Neill, Snow, Taylor and Adams Treasury. Rubin and Summers used the mantra to influence the level of the dollar. O'Neill and Snow used it only out of legacy (one could argue that O'Neill used it once to support the dollar after he told a German reporter there was no strong dollar policy per se and the dollar sank...generating the Yankee Stadium reference) and to assure investors that an "invisible" safety net was in place.

From day one the Bush international economic policy has been driven by the
belief that markets on their own get currencies and the dollar right and that governments including this one are best to leave markets to their own making. It is no coincidence that there has never been a time in 5 1/2 years of the Bush Presidency that currency intervention by US authorities was a distinct risk. It was never even a remote risk. To a large extent a dollar policy is at odds with the faith in markets getting exchange rates right.

I am confident we will hear Paulson utter the mantra at some point in time, sooner than later, when a member of the press gets to clarify this curious situation. But we should also stand back a bit and recognize that this week's confirmation hearing and the silence on the dollar speaks volumes. The Treasury believes in focusing on policy measures that will facilitate adjustment like increasing foreign demand and domestic savings and letting markets handle the dollar's role in the adjustment process. Outside of the halls of MoF and the French Finance Ministry, there is near unanimity in belief that markets will in time take the dollar lower.

David Gilmore


Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."

Actionable trading levels delivered to YOUR charts in real-time.

Register To Test Your Amazing Trader

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Mon 9 July 2018
AA 12:00 EZ- Draghi EU Parliament Testimony
Tue 10 July 2018
AA 08:30 GB- Ind/Prod Output, Trade
AA 09:00 DE- ZEW Survey
Wed 11 July 2018
A 12:30 US- PPI
A 14:00 CA- Bank Of Canada Decision
A 14:30 US- EIA Crude
Thu 12 July 2018
AA 12:30 US- CPI
Fri 13 July 2018
A 14:00 US- Prelim University of Michigan
John M. Bland, MBA
co-founding Partner,

Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube

Max McKegg's Daily Forex Trading Forecasts

Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.

Request a TRIAL of Max's Forex Service.


Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map

Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.



By using this website, you are agreeing to our Privacy Policy and Terms of Use, and Cookie Policy

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105