Giving The Dollar a Buildup

But too strong a currency could aggravate the trade gap

In the past half-year, the downsize dollar has finally done wonders for U.S. trade problems. By making American products more competitive overseas and foreign imports more expensive at home, the smaller dollar helped shrink the U.S. trade deficit to just $9.9 billion in April, the lowest in more than 2 1/ 2 years. But in the past two weeks, the dollar has climbed 5.9% against Japan's currency, to 133 yen at the end of June, and 3.7% vs. West Germany's, to 1.81 marks. That still leaves it 48% below its peak 3 1/2 years ago. So far, the U.S. has made...

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