US dollar is the official currency of the United States of America. It is represented by the symbol $ and often called by different names in different parts of the world. Buck, paper, greenback, dough are some to name a few. Often the US dollars are also named after the presidents and it is probably the only currency named so.
Printing of the currency has direct effect on the value of the currency. For an instance, when a country prints more currency than it actually needs the value of the currency automatically decreases. It is the same for anything that you come across, when the production of something is done in excess of its needs, then the value of its decreases.
US dollar also has a major effect in the cross rate effect of other currencies. US dollar is one of the two most popular trading currencies used around the world. Currencies do have pairs, when a currency pair does not have the US dollar as a currency pair, is considered as being the part of the currency cross rate.
A country's economic condition also has direct impact on the value of its currency. If economic status of the country is not good, the value of its currency will automatically decrease. There are major factors that affect the economic status of a country, which includes intensity of unemployment, width of consumer spending and the increase in business expansion, which occurs in a particular country.
The impact of US dollar is also seen in the forex market, it is the currency used for trading all around the world. US dollar, apart from representing the leading currency reserve in the world, is also referred to as a standard unit for commodities sold nationally and internationally.
Inflation did happen twice in America during the world wars and the federal reserves were asked to take necessary steps, in order to counter the inflation during wars. Depressions too occur in the country in the thirties causing deflation and rising need of revision measures. During the 70s stagflation was also noticed in the value of the currency, which also led to inflation which was later controlled by allowing a balanced rate of inflation.
In order to ensure the flexibility of the currency, Federal Reserve banks were made, this also made sure that the currency was volatile enough and could be changed within short interval without any difficulty. As the banks came into existence, they were able to stand up to their expectation and work according to the objectives set for it. This was possible as it made sure that the value of the US currency and the price stability of product were maintained.
The interest rates also play a major role in determining the value of US dollar, with higher interest rates the value increases and with lesser interest rates people tend to start investing on other currencies, thus the value of the American currency falls. Apart from the mentioned factors, there are several other factors that affect the value of the US dollar; however, it still is the most influential currency in the world.
Printing of the currency has direct effect on the value of the currency. For an instance, when a country prints more currency than it actually needs the value of the currency automatically decreases. It is the same for anything that you come across, when the production of something is done in excess of its needs, then the value of its decreases.
US dollar also has a major effect in the cross rate effect of other currencies. US dollar is one of the two most popular trading currencies used around the world. Currencies do have pairs, when a currency pair does not have the US dollar as a currency pair, is considered as being the part of the currency cross rate.
A country's economic condition also has direct impact on the value of its currency. If economic status of the country is not good, the value of its currency will automatically decrease. There are major factors that affect the economic status of a country, which includes intensity of unemployment, width of consumer spending and the increase in business expansion, which occurs in a particular country.
The impact of US dollar is also seen in the forex market, it is the currency used for trading all around the world. US dollar, apart from representing the leading currency reserve in the world, is also referred to as a standard unit for commodities sold nationally and internationally.
Inflation did happen twice in America during the world wars and the federal reserves were asked to take necessary steps, in order to counter the inflation during wars. Depressions too occur in the country in the thirties causing deflation and rising need of revision measures. During the 70s stagflation was also noticed in the value of the currency, which also led to inflation which was later controlled by allowing a balanced rate of inflation.
In order to ensure the flexibility of the currency, Federal Reserve banks were made, this also made sure that the currency was volatile enough and could be changed within short interval without any difficulty. As the banks came into existence, they were able to stand up to their expectation and work according to the objectives set for it. This was possible as it made sure that the value of the US currency and the price stability of product were maintained.
The interest rates also play a major role in determining the value of US dollar, with higher interest rates the value increases and with lesser interest rates people tend to start investing on other currencies, thus the value of the American currency falls. Apart from the mentioned factors, there are several other factors that affect the value of the US dollar; however, it still is the most influential currency in the world.
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