The Guardian

London, January 2:

When US president Bush will have reason to be grateful this month that a leader’s success at stewarding his country’s economy is no longer measured by the strength of its currency. Since he first came to power four years ago, the dollar has already lost more than 10 per cent of its value, with the latest frenzied sell-off taking place since he was re-elected in November. The greenback has further to fall, but it is only the most visible symbol of the creaking imbalances in the global economy that will challenge policymakers throughout 2005.

Bush’s re-election seemed suddenly to focus the foreign exchange markets on America’s vast current account deficit, which is fast approaching 6 per cent of GDP. Economists had said for a long time US could not continue spending more than it earned indefinitely.