Treasury Secretary Timothy F. Geithner issued another emphatic statement about the need to "maintain a strong dollar," but financial markets know he wasn't serious.
After Geithner's comments in Tokyo on Wednesday, an index of the dollar's value against six major rivals rebounded from a new 15-month low to end the day slightly higher.
But the Obama administration, like the Bush administration before it, is paying only lip service to the idea of keeping the greenback strong even as the currency continues to lose value against its major and minor foreign rivals.
This is theater, but it's still important in the scheme of things, says Dan Katzive, currency strategist at Credit Suisse in New York.
Although global markets fully expect the dollar to stay weak because of rock-bottom U.S. short-term interest rates and soaring federal borrowing, among other reasons, Katzive notes that it's in everyone's interest for any further decline in the currency to remain orderly -- which pretty much describes the dollar index's 37% drop since mid-2001, including this year's slide of 7.6%.
The last thing the world needs is a sudden dollar collapse that could trigger market pandemonium.
With traders already inclined to keep selling the U.S. currency, imagine the market's reaction if Geithner were to say, "You know, we've thought about it, and we'd really like to see the dollar fall a lot more."
Even if the administration believes that -- given that a weakening buck is a boon to U.S. exporters -- no one in a position of power is going to say so for fear of waving a red flag at markets.
Instead, by reiterating the stock phrase about dollar strength, "they're assuring the markets that the U.S. isn't going to talk the dollar down," Katzive says.
Besides, the administration has to be figuring there's no reason to mess with success.
Consider: One long-term concern about a falling dollar is that it could undercut U.S. financial markets by scaring away foreign investors, whose dollar-denominated assets lose value as the greenback falls.
But the Treasury bond market isn't suffering from a lack of investor demand even though the administration is borrowing record sums. And the U.S. stock market, too, remains robust, as investors see dollar weakness as good news for American multinational firms. The Dow Jones industrials rose to a fresh one-year high Wednesday.
"It's the best of everything right now," says Win Thin, a currency strategist at Brown Bros. Harriman in New York.