The world Inflation and Currencies in 2008

While the world is trembling from the possibility about recesion of the American economy, the inflation in global view is growing too fast. In this circumstances, the exit may bring to depreciation of the European currency and growing of Asian money, commented Reuters.
America Dollar will start to getting stable after more than 2 years weakness. In the last month, the American currency is signing seriously increasing in comparison with European one, because of darker predictions for future of European economy.
In the previous week, the EUR lost 2% from its price toward the USD, which was the hardest weekly correction from June 2006. The markets started to attune for the first interest level decrease from the European Central Bank. The interest was kept higher, to fight with inflational risks. Unfortunately, the strategy is not giving the right result and in the moment Eurozone will be in front of the possibility for developing of stagfation (low economy growing followed by high inflation).
In China, where the national currency is controled by the country, there are other kind of difficulties. The Chinese dilemma is connected with keeping of the higher economy growing and low inflation, and finally yuan will be let to grow. In the moment, the inflation in the country is with 11 years top, which is embarrassing more of economy analyzers from the whole world.
In moment, when the global economy growing is slow, and the prices are raising fast, the increasing of the currency will raise the buying possibility of the population. According to standart understanding, the countries with weak currencies (Dollar and Chinese yuan), will cope more easily with the getting wider inflation in 2008.