What are the major factors that affect the value of the US Dollar?
Answers
2547 points
Oldman answered 3 months ago …
The Fed Funds rate and the current account deficit. As the amount owed goes up...purchasers want a higher rate of interest to cover the possibility that 10 or 20 years from now, the country will be able to redeem the bond...and the falling Fed Funds rate means that current Treasury bonds don't compensate for historical global inflation.
There's an intersting movie debuting cross country about this... it's called "I.O.U.S.A." Go see it!
2703 points
MNSL answered 3 months ago …
Following are Some Factors that Affect the Value of the US Dollar
Balance of trade
Falling prices on imported and foreign goods:
President’s popularity
Terrorist attacks and war:
Elections
Tax cuts for consumers
Turmoil in other countries
A strengthening or weakening Euro
Acceptance of oil in dollars
Demand for dollars
Demand for physical currency outside the US
Rise in interest rates
Interest rates in other countries
Entrepreneurship:
News about inflation and commodities
Based on the above factors and due to some other factors I strongly believe US Dollar will appreciate against following currencies in the next 18 months.
Euro, GBP, Yen, AUD, NZD,CAD and some commodity oriented currencies.
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