Tag: us dollar value

Foreign exchange currencies and currency exchange rates are the key to understanding how economies work. They constantly allow the value of a single item or a basket of commodities to be expressed across borders, across cultures and across oceans. Currency exchange rates are like a monetary language that interprets the world around us and the economies it represents. We need to understand though that currency exchange rates are needed since a currency accepted in one country is not accepted in some other country. Your Indian Rupees are no good in Switzerland, and you’ll need to buy Swiss Francs from a bank or a foreign exchange dealer. So the currency exchange rates represent nothing more than the cost of converting a currency from one to another. At its heart it is simply a purchase price dictated by market forces, as it is for any other commodity. For centuries, world currencies were  [...]

Lot of factors were responsible for dollar’s downward slide on Monday. Like before Fed Chairman Ben Bernanke’s comment that interest rates will continue to be low as the economy shows some signs of recovery was the most important factor in pulling the dollar down. Also lack of agreement between Asian and US leaders on currencies was taken as a signal by traders to sell the dollar. The United States and China leaders had met at the Asia Pacific Economic Cooperation (APEC) forum in Singapore to discuss currencies. However they failed to come to an agreement which was taken by traders as an indication that the dollar’s downward trend will continue and that the US interest rates will continue to be low while interest rates in other countries may eventually increase. In search of better return investors normally transfer funds to an economy with higher interest rates. Other economies  [...]