NEW YORK, Jan. 5 (UPI) -- The Conference Board of New York said Wednesday there is a limited risk for further U.S. dollar weakness as global growth slows.
The board said although the dollar has weakened considerably during the period the global economy picked up, further declines will be less likely.
The primary effect of a weaker dollar will be to reduce investment and profitability outside of the United States, overshadowing any domestic U.S. inflation and interest rate increases that result from the weaker currency.
As a result, global growth is likely to slow, led by overseas economies, by mid-2005.
That, according to Conference Board chief economist Gail Fosler, is likely to put pressure on the very currencies that are strong against the dollar, reversing the dollar's downward trend.
