As the G-7 leaders meet the future of the dollar was of prime concern. If there’s been any issue that’s been topmost on the minds of the political leaders and the financially savvy in the present times, it’s been the value of the dollar which does not seem good owing to the bad economic conditions. With the world seeing a shift in the focus of world economy from America and the European countries to Asia, particularly China and India, the question  becomes all the more pertinent. There is an indication that economic power is shifting from the West to the Asian countries. Some economists predict that there might not be an actual shift of economic power, though it might temporarily appear to be so owing to the current recession which has been the worst since the last world war.

According to an Associated Press report, the value of the dollar has been steadily decreasing in the foreign exchange markets for quite some months now. The value of the dollar has been steadily falling against the value of the yen for about eight months now. The depreciation of the dollar value seems to be retarding economic development and it looks as though it might bring recovery to a complete standstill altogether. But the last week saw the value of the dollar up by 0.2 percent. The euro remained steady at $ 1.46 whereas the yen remained steady at 89.75.

The plunging dollar value has an adverse impact on importing from other countries because these countries will find it difficult to export goods to the US when the dollar value is really down. The price in oil is expected to rise as it is valued in the US currency denomination. The depreciation of the dollar is an issue of concern for not only USA or the West but also for the rest of the world.

According to Simon Derricks, Bank of Melon currency strategist, “It seems entirely logical that the G-7 may break with tradition at the end of their meeting this weekend and choose not to release a statement on the global economy and currencies. However, it is also clear from recent comments that tensions within G-7 over currency matters remain as high as ever.”

Jeane Claude Trichet, President European Central Bank, opines that excessive volatility would lead to financial and economical instability. Currency analysts feel that a large part of the tension caused due to the dollar is because of China maintaining an artificially low value of its yuan against the dollar to boost exports to the US due to which it has now got excess trade with the USA. The International Monetary Fund and the World Bank feel that the uneven financial proportions between the US and China have made the presence of China important in the G 7 issue.

Though it might appear that the  economic shift is towards the Asian countries, it might be a long time before that happens. There is still hope for the US because, marketing analysts feel that the Asian market is not as open for new entrepreneurs as the western market which is sufficient reason for the economic control remaining with the US.