Worried About the Dollar

A fast-falling greenback is a serious threat to the market and the economy

Getting nervous? In the past two weeks, the Dow Jones industrial average has fallen 529 points, a drop of nearly 10% since its August peak, punctuating a dismal third quarter. Investors are hoping--praying might be a better word--that Fed Chairman Alan Greenspan will decide against the third interest-rate hike of 1999 when the central bank's Open Market Committee meets this week.

Much of the trouble stems from a single concern: the weakening U.S. dollar. The greenback had been the strong, silent type for the past six years, making European vacations and Japanese electronics cheaper, while at the same time attracting foreign...

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