Latin America on Alert for Weak US Dollar

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Caracas, Sept 22 (Prensa Latina) Latin American financial markets are watching attentively the growing weakness of the US dollar, due to the high-risk credit crisis and unrest about the future of the US economy.

The latest statistics show a sustained strengthening of the euro, which was quoted at 1.41 dollars, a trend that consolidates the credibility of the European currency and attempts against Europe's exports.

Venezuela is weighing measures to prevent the adverse effects of the crisis, including the diversification of the country's hard-currency reserves.

In that regard, President Hugo Chavez has ordered measures to reorient the capitals to the euro and the Asian currencies to minimize the negative impact from a weak dollar.

On the other hand, for those Latin American companies for which the US market is the main destination for their exports, the current situation translates into a decrease in their real purchasing power.

If the US economic growth slowed down, the large commercial groups from the subcontinent would face a drop in demand for goods and services that would lead to the deterioration of their operations.

Financial experts in Washington pointed out that the current situation of the dollar favors the country's exports and contributes to reducing the huge trade gap that affects the balance of payments.

The experts added that a weak dollar would benefit Latin America, as the continent's debt in that currency would decrease.