NAM Trade-Weighted Dollar Index
The value of the dollar is an important factor in export growth. When the dollar is excessively strong against other currencies, U.S. exports do not grow. For example, during the entire 1997-2002 period, when the value of the dollar shot up nearly 40 percent against major currencies, U.S. exports grew only 0.3% per year.
But when the dollar is competitive – not too far from its normal average – U.S. exports grow in double digits. From 2002-2008, for example, U.S. manufactured goods exports grew 10.3% per year.
The NAM tracks the value of the dollar on a weekly basis using data from the Federal Reserve Board, so NAM members and others may see how close or how far from its normal level the dollar is.
Yuan-Dollar Exchange Rate
Given China’s role as the world’s leading exporter and its huge trade surpluses – which the International Monetary Fund (IMF) has said are a major contributor to global trade imbalances – China’s highly undervalued currency (known as both the yuan and the renminbi) plays a key role in restoring global balance. The U.S. Treasury, the IMF, the European Central Bank and many others have pointed to the need for China’s currency to be more flexible and be allowed to appreciate in the direction of what a market-determined currency would be. Because of the importance of the currency and China’s mid-year announcement that it will allow its currency to appreciate, the NAM tracks the value of the yuan on a daily basis. The percentage figures in the table below show the yuan’s appreciation since China’s June 18, 2010.