Where does the dollar go from here?


Over the past few months, numerous pundits and analysts have weighed in on the issue of using the dollar as the world's currency. As the dollar remains more or less flat (it traded at about $1.4350 to the euro on Thursday), perhaps it is time to seriously consider the pros and cons of continuing to use the greenback.

Factors supporting the dollar:

U.S. GDP - The economy contracted by a less-than-feared one percent in Q2, as the interventions in housing and banking, re-liquefied credit markets, and fiscal stimulus appear to have put a floor under commercial activity. If the recession has bottomed, and business investment, exports, housing demand, and consumer demand increase, the U.S. will vector toward a decent-sized recovery. That would increase the attractiveness of U.S. investments, boosting the dollar.