Implications of a Weaker Dollar

Over the past month, the U.S. dollar has weakened against the euro, yuan and rupee amid geopolitical tensions and escalation in the Middle East. Investors who seek shelter in safer currencies are getting gun-shy about the dollar, a dynamic reinforced by the Federal Reserve’s limited ability to respond more forcefully to a weakening economy. Although Fed member Michael Barr said the central bank should be prepared to raise interest rates if inflation persists, a potential rate hike in September runs counter to the interests of the government; U.S. President Donald Trump expects economic growth and has urged the Fed against raising rates…