Long Term Perspective
Export demand picked up between 2002 and 2004, spurred by a sharp drop in the trade-weighted dollar. Even as the FX value of the dollar increased in 2005, export demand remained relatively healthy. In 2006, both a weaker dollar and a pick up in overseas economic growth kept export growth strong. Export demand depends both on the economic growth of our trading partners and on the value of the dollar.

Short Term Perspective
Year over year gains in exports remain strong; the trade weighted dollar shows a deterioration over the past several months. One would expect a falling dollar to bode well for the export market since it makes prices of U.S. goods less expensive to foreign buyers.