why is the dollar weak compared to the euro and pound?
why is the dollar so weak compared to the euro and pound? i’m not an economist and don’t get the stock market and everything like that real well, so keep that in mind. the euro, is it so strong because it has all of the EU countries economies behind it or something like that? and why is Great Britain, such a small country, doing so good in terms of currency?
Extra tags:
- why doller is small compare to pounds,why is the dollar weak compared to the euro,why has the euro gotten so weak,Dollar Compared to Pound,why is the pound so storng against the US DOLLAR,why is dollar weak,why is dollar weak compared to euro,why is the dollar is weak against pound,why is the dollar not worth a lot compared to the pound sterling,why is the dollar so high in comparing to euro,WHY IS THE DOLLAR SO WEAK AGAINST STERLING,why is the dollar so weak compared to other currency,why is the dollar still so weak against the Euro in January 2012?,why is us dollar weak compared to the pound,why is the dollar weak against the pound,why is the dollar weak compared to the pound,why is the dollar weak to the pound,Why is the Euro more valuable than the Dollar?,why is the euro still strong compared to the dollar,why is the dollar weak
Related posts:
- Why is the British Pound still weak against the Euro? Today the British Pound Sterling rose against the US Dollar at an4 all year high at .563. But Sterling is still weak against the Euro...
- Im doing GCSE business and need to know, what currency is the pound weak against? in exchange rates the british pound can be strong or weak against a currency, i know that the pound is strong against the Euro because...
- Why is the dollar only being compared to the Euro? The dollar has lost a lot of value compared to the Euro but why isnt it compare more often to the British Pound which is...
- Why is the British Pound and the Euro so strong compared to the US Dollar and the Yen? For every 2 dollars you get 1 British Pound. For every 1 Pound, you get 200 Japanese Yen. What are the driving forces that make...
- Is it possible for the dollar to be weak against some currencies but strong against others? We hear a lot of talk about how the dollar is so weak. When the dollar is weak, is it weak everywhere in the world,...
Tagged with: currency • dollar • Economist • eu countries • Euro • Great Britain • pound • stock • stock market
Filed under: Currencies
The primary reason for the weakness in the dollar is because the United States runs massive trade deficits and budget deficits. Consider this: the U.S. keeps printing more and more dollars to pay for foreign goods and domestic spending. Doesn’t it stand to reason that dollars will be worth less and less over time?
There are other countries that run deficits, but none to the degree that the U.S. does.
historically pounds have been always been more valuable than$$ , trade and budget deficeits, as well very low interest rates. The only reason it doesn’t even trade lower is that oil and gold must be paid for dollars.
First, you need to understand the definition of money. Money only has value when it has something backing it. Money is just a representation of value.
Then we can establish a simple fact: the more money there is, the less each dollar/euro is worth. Just imagine if I was trying to use money to represent 4 stuffed dogs. If I had 4 dollars, each dog is worth a dollar. However, if I had 8 dollars, each dog is worth 2 dollars.
See what happened? Because there was more dollars, each dollar was worth less. This is what we often call inflation. As we print more money, the value of that money goes down and products become more expensive.
What’s happened in the united states is that we’ve turned our money printing over to the Federal Reserve. They print a bunch of money, and our money starts loosing value compared to other currencies.
Urm,
All of the above reasons are false. It is diversification of currency reserves of most countries, and ofcourse the interest rates of both the FED and ECB.
http://bit.ly/aIfsi0