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USD getting stronger - reason?

Posted on 2012-04-12
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Last Modified: 2012-04-18
what is the trend/reason behind the USD getting stronger the last few weeks?
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Question by:25112
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Carlisle_Agent earned 1000 total points
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Value of the USD is mostly affected by the US Economy. The stronger the economy, the more valuable the currency is in comparison to other currency (other countries money). Voting Ron Paul. GG Thx
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by:speed_54
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Economic and political conditions dictate the relative strength of the dollar against other currencies. As these conditions unfold, a dollar will be worth more of another currency (strengthens) or be worth less (weakens). For example, if one U.S. dollar is equal to 115 Japanese yen and the dollar strengthened, you might then be able to get 117 or 119 for the same dollar. In the same way, a weakening could drive the exchange rate down to 111, 110 yen per dollar.
Also raising the percentage that a central bank or monetary authority charges on loans to commercial banks strengthens a nation's currency because it raises the returns on deposits in a given currency in relation to other currencies, as well as signaling growth in the economy and a decline in inflation. The Federal Reserve raises or lowers the percentage to influence national savings, investment, employment, inflation and the exchange rate.
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