dollar is getting stronger

Monday's WSJ reports the effects of the stronger dollar on earnings. Even big companies with the resources to manage their currency risk took big hits because of the sudden change in the exchange rate. It should not have been a surprise. The surprise was how long the euro remained strong in the face of the problems in the euro zone. There was a lot of commentary about how the PIIGS needed to be able to devalue their currencies to stay competitive, but couldn't because they used the euro. Well, the euro is getting weaker which accomplishes the same thing (although probably not as much as if they were doing it on their own with their old currencies). The down side from the U.S. point of view is that economies like Germany, which were already competitive, are even stronger. As I emphasize in my book, if you don't manage your currency risk, you are speculating.