For years, US Treasury secretaries parroted a line that America was committed to a strong dollar policy. But as the greenback slides close to all-time lows, President Barack Obama's administration has been noticeably quiet. Treasury Secretary Tim Geithner last used "strong dollar" language in November, and a glance through his speeches and news databases shows he has had almost nothing to say on the matter since.
Meanwhile, record low interest rates, the Federal Reserve's bond buying program, staggering budget deficits and the White House's export-driven jobs policy all have contributed to the dollar's decline.
All this has a growing number of investors and currency experts thinking Washington is passively accepting a gradual decline in the currency, hoping it helps engineer a vigorous enough recovery to get a battered economy in order. "There is no obvious evidence of that in official rhetoric or in the commentary of key officials, but de facto the United States is permitting if not aiding a deliberate dollar decline," said Allen Sinai, chief global economist for Decision Economics Inc in Boston.
"The heart of the dollar decline," he added, stems from the super-loose monetary policy run by the Federal Reserve for more than two years as opposed to fiscal or tax policy. "Markets aren't going to buy the dollar when you offer zero interest rates and have an economy that is growing at roughly one-third the rate of China's - that's an easy choice for investors."
On Thursday, the dollar index, a gauge of the US currency against six advanced country currencies, fell to 73.735, its lowest level since August 2008, setting up a possible run toward its record low of 70.698 touched in March 2008. The euro soared to a 16-month high above $1.46. Geithner last year flatly denied he is pursuing a policy aimed at cheapening the dollar.
"We will never use our currency as a tool to gain competitive advantage," he told reporters last November after a meeting in Kyoto, Japan, of finance ministers from the Asia-Pacific Economic Cooperation group. "I'm happy to reaffirm again that a strong dollar's in our interest as a country."
Undeniably, though, financial markets see the dollar on a slide against other currencies that is likely to continue, in no small part because current trade policy seems to demand it. "It's implicit in the administration's call for a doubling of exports, that can't happen without the dollar falling," said David Gilmore, a partner at FX Analytics in Essex, Connecticut.
The US government's consistent pressure for a revaluation of the currency of its major trading partner, China, only underline these perceptions.
Much of the argument for the dollar's decline - down 6.2 percent this year against that basket of six major currencies - comes back to the Fed's policy of keeping interest rates low to spur a fledgling recovery from the 2007-2009 financial crisis. It's a policy that's drawn criticism from the world's new economic powerhouses in Latin America and Asia, who say US monetary policy is fuelling global inflation and hurting efforts to balance the global economy.
Strong corporate earnings reports this week showed the declining dollar has helped US companies sell drugs, chemicals and food in foreign markets.