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Weak U.S. dollar affecting global markets

A Chinese man walks past a large billboard, featuring images of U.S. dollars, advertising a new international business complex in downtown Beijing, China on December 10, 2007. China's currency, the yuan, hit a new high against the US dollar last week, according to the Chinese Foreign Exchange Trading System. (UPI Photo/Stephen Shaver)
A Chinese man walks past a large billboard, featuring images of U.S. dollars, advertising a new international business complex in downtown Beijing, China on December 10, 2007. China's currency, the yuan, hit a new high against the US dollar last week, according to the Chinese Foreign Exchange Trading System. (UPI Photo/Stephen Shaver) | License Photo

WASHINGTON, Dec. 24 (UPI) -- The U.S. dollar's drop is having a ripple effect worldwide, being blamed for labor strife in the Middle East and job losses in Europe.

When it was strong before 2000, the U.S. dollar allowed Americans to gobble up foreign goods cheaply and it provided worldwide economic clout, The Washington Post reported Monday. Now, though, economists said the weakened dollar is having a diminishing effect abroad.

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"The dollar was the dominant force in world economics for 100 years -- we had no competition," C. Fred Bergsten, an economist and director of the Peterson Institute for International Economics in Washington, told the Post. "There was no other economy close to the size of the United States. But all that is now changing."

The declining dollar, blamed for wage strikes and dropping buying power in the Middle East, and its role in fueling inflation has become a rallying cry in the Muslim world, where leaders such as Iranian President Mahmoud Ahmadinejad, sought to turn the weaker greenback into a new point for anti-Americanism.

Because of the dollar's weakened position, a few European companies are set to shift some manufacturing lines from Europe to the United States.

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