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Scott Jagow: The dollar hit yet another low against the euro this morning. The one positive of a weaker dollar is that our trade gap with other countries is shrinking. We get the latest trade-deficit numbers this morning. More now from Paul Brandus.
Paul Brandus: A weak dollar’s no fun if you’re a tourist heading overseas. But if you’re a businessman exporting, say, widgets, it’s good news, because the cheap dollar makes them more competitive.
And when that money from those sales comes home, says economist Gary Huffbauer of the Peterson Institute, it translates into a lot more dollars for American companies.
Gary Huffbauer: That works out to about an extra 100 billion or so of extra exports in 2008, above 2007.
An extra hundred-billion? That’s enough to add 1 percent to the U.S. economy next year — softening the blow from housing and oil prices.
Even though the dollar is at record lows, Huffbauer thinks it’ll continue to fall, narrowing the trade gap further:
Huffbauer: We’re about one-third of the way through the reduction in the trade deficit that we will see over the next five years.
Surging exports mean the U.S. is likely to stay the world’s top exporter for quite awhile.
In Washington, I’m Paul Brandus for Marketplace.
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