Are countries in East Asia concerned that a falling dollar will hurt their exports?
Countries that peg to the dollar are seeing the value of their currencies fall against the euro and are seeing a rapid increase in their exports to Europe. So for many countries, the concern isn’t that a fall in the dollar will lead to a fall in their exports. It’s that economic weakness in the U.S. will spread to Europe, and that the broader reduction in global growth will lead to a reduction in their export growth. Now there are specific concerns in countries like India and Thailand that have let their currencies appreciate against the dollar and the renminbi—they are a little worried that China will undercut them in global markets. As a result, they’ve been resisting further appreciation in their currencies. But I would put a great deal more emphasis on concerns that U.S. weakness may be the leading edge of a broader global slowdown. Specific Asian economies, particularly those like China that are doing very well and are pegged to the dollar, worry that there’s a growing difference
