Watching the dollar's rise

LITTLE wonder that the world financial community is watching the continuing rise of the dollar with such interest these days. The dollar continues to post new records against foreign currencies. Many experts believe that, for the moment, at least, little can be done to stop that advance -- including direct intervention by foreign central banks seeking to prop up their own currencies. Washington should not be indifferent to what is happening on the international currency front. The dollar's rise, among other factors, can be attributed to expectations of rising interest rates in the United States, in part stemming from inadequate measures to reduce federal budget deficits. There are other factors, of course, some technical, some political. Overseas investors continue to look upon the US as a conservative, safe climate for long-range investment potential.

But the climbing dollar presents problems for the US. Granted, overseas investors are helping to finance the federal deficit. But at the same time, the strong dollar is clobbering US exports. One labor analyst maintains that as many as 3 million jobs were lost last year because of the dollar's advance and diminished export trade. One solution seems practical: Congress should consider proposals to merge US trade-related offices into a single Cabinet-level agency to help promote exports.

Another message seems equally clear: Washington must get federal deficits under control.