The dollar hit a 15-month low today leading to "concern over the future of the dollar as the central currency in the global economy" (Financial Times). The prices of gold and oil continue to rise as the US unemployment stats hit new lows. At a roundtable discussion with Japanese reporters, US Treasury Secretary Timothy Geithner repeated his support for maintaining a strong dollar.

What is the future of the US dollar as an international currency? In The Future of the Dollar, Eric Helleiner and Jonathan Kirshner analyze the dollar's international role through multidisciplinary perspectives and a range of contrasting predictions to the question of the dollar's future. Presently, C. Fred Bergsten writes for the November/December 2009 issue of Foreign Affairs that given the size of the national budget and trade deficits, the US must embrace a declining dollar: " US policymakers, therefore, must recognize that large external deficits, the dominance of the dollar, and the large capital inflows that necessarily accompany deficits and currency dominance are no longer in the United States' national interest." In a similar vein, Brad Setser in a memorandum for the Council on Foreign Relations examines policy options that could limit US vulnerability associated with a falling dollar.

Beyond national actors and policy, the demise of the dollar can also be attributed to international entities. "It's really the comments that were attributed to the IMF as well as the G20 that have had the U.S. dollar under pressure," said Jack Spitz, managing director of foreign exchange at National Bank Financial (Financial Post). In contrast, the recent promises of the G20 have contributed to an increase in the Canadian dollar. In an interview conducted by the Financial Post, technical strategists explain that: "The market is a bit more risk-seeking today given how stocks and commodities are doing, so that's generally what's hurting the U.S. dollar and benefiting the Canadian dollar".

Related:

• Experts: Monetary Policy
• In the Classroom: Monetary Convergence between Canada and the United States: A Critique of the Official View
• In the News: Loonie, gold, oil rise as dollar sinks
• In the Spotlight: The Loonie and the Greenback: Towards Parity?
• Past Feature: The State of the Economy

(Image credit: Flickr user donbuciak)