What are the factors which determine the value of the Euro vs. the United States Dollar?
What factors determine why the United States Dollar is currently weaker than the Euro used by many European countries?
(Or currency in general)
Answer:
The market demand and supply of dollars in exchange of Euros and Euros in exchange of dollars determine the value of one dollar in terms of Euro as well as the peoples' expectations of the trends in the market demand and supply in the near future. .The higher is the demand for a currency and lower is its supply the stronger is the currency. Demand for US dollars arise from the demand for importing goods and services from US and for foreignersmaking investment in the US. Supply of dollars emanate from US need to import good and services from outside the country and US residents making investment in foreign countries. The US is continuosly making trade and current account deficit and the foreingners are not investing in the US with the same degree of entuasism as in the past. So, the dollar is weakening.
The number one factor affecting the value of the almighty dollar in relation to other currencies on the foreign exchange is the gigantic U.S. deficit. Other factors include the vascillating stock market and inflation.
Yet a huge deficit in not necessarilly a bad thing since a weak dollar means U.S. goods are cheaper to buy therefore are in greater demand overseas.
Hmm.
How about Inflation, National Indebtedness, Stability Of Government and Worldwide Confidence in the relative economic progress or stagnation of either?
The relative value of the Euro and the dollar is based on market forces. This means that it is based on both emotional and logical factors. Logical factors include the interest rates in each currency, trade balances, and and steps taken by the nations' central banks. Emotional factors usually are caused by important events in the countries involved, including election results, disasters, short term financial or economic results. . . anything that hits the news, and may cause people to lose or gain confidence in a nation's economy.
Many factors impact the relationship between the Euro and the US Dollar.
Gross National product
Net Exports
Money internally in circulation
bonds held by foreign entities
Interest Rates
The expectation of people across the world of what the economies of the USA and the European Union will be like in the future.
More Questions and Answers:
What are the chances of cooperatives taking over and becoming dominant in the economy?
Who is the richest man in india?
Why Farmers should be protected?
What is the definition of Per Capita GDP?
Can any one tell me the exat values for $,pound,euro...?
Balanced budget (economics define)!?
National income question?
Do we care where our possessions are made?
The econometric model which affect the foreign trade of france?
Random econ questions?
(Or currency in general)
Answer:
The market demand and supply of dollars in exchange of Euros and Euros in exchange of dollars determine the value of one dollar in terms of Euro as well as the peoples' expectations of the trends in the market demand and supply in the near future. .The higher is the demand for a currency and lower is its supply the stronger is the currency. Demand for US dollars arise from the demand for importing goods and services from US and for foreignersmaking investment in the US. Supply of dollars emanate from US need to import good and services from outside the country and US residents making investment in foreign countries. The US is continuosly making trade and current account deficit and the foreingners are not investing in the US with the same degree of entuasism as in the past. So, the dollar is weakening.
The number one factor affecting the value of the almighty dollar in relation to other currencies on the foreign exchange is the gigantic U.S. deficit. Other factors include the vascillating stock market and inflation.
Yet a huge deficit in not necessarilly a bad thing since a weak dollar means U.S. goods are cheaper to buy therefore are in greater demand overseas.
Hmm.
How about Inflation, National Indebtedness, Stability Of Government and Worldwide Confidence in the relative economic progress or stagnation of either?
The relative value of the Euro and the dollar is based on market forces. This means that it is based on both emotional and logical factors. Logical factors include the interest rates in each currency, trade balances, and and steps taken by the nations' central banks. Emotional factors usually are caused by important events in the countries involved, including election results, disasters, short term financial or economic results. . . anything that hits the news, and may cause people to lose or gain confidence in a nation's economy.
Many factors impact the relationship between the Euro and the US Dollar.
Gross National product
Net Exports
Money internally in circulation
bonds held by foreign entities
Interest Rates
The expectation of people across the world of what the economies of the USA and the European Union will be like in the future.
The answers post by the user, for information only, FunQA.com does not guarantee the right.
More Questions and Answers: