Briefly, in 2008, the Swiss franc and the dollar reached parity. Last September, the franc made another run at the dollar, reached parity again... but this time it passed right through and hasn’t looked back.
A weak dollar is even a concern here in Colombia. During one of our meetings with bankers yesterday, they lamented the exchange rate reaching 1,900 Colombian pesos to the U.S. dollar. Only last year, the central bank had a policy of intervening to keep the currency within a 2,200-2,600 range versus the dollar. They have given up that strategy and are targeting the 1,900-2,000 range.
"If the peso strengthens to 1,600," our new friends were telling us, "pffft... it's over." The currency would be strong enough to make Colombian goods too expensive for exporting. The recovery they see under way now would be in grave danger.
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