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Dollar value increased

US Dollar

US Dollar value increased

During the past week, the value of the US dollar has risen against the rupee in the interbank.
During the past week, the value of the US dollar against the rupee has increased in the interbank, but in the local open currency market, the value of the US dollar has declined. According to the Forex Association, the value of the US dollar against the rupee in the interbank period is 18 paise. The increase was recorded while the local open currency market recorded a decrease of 10 paise in US dollar value.

According to the Forex report, the value of the euro and British pound fell by 20 paise and 1.20 respectively. According to the Forex Association, the local open currency market was trading at Rs 155.80 and the selling price at Rs 156.10. However, the value of the euro declined by 50 paise, whereby the price of the euro dropped from Rs 172.50 to Rs 172 and the sale price fell to Rs 174 to Rs 174.50. Price sales dropped from Rs 201.20 to Rs 201.
US Dollar

The U.S. dollar is strong when the dollar's value is high relative to other currencies compared to the past. This means one of two things. It can mean the US dollar is near the top of its historical range. As measured by the DX.F, the all-time high for the US dollar was 163.83 on March 5, 1985. That's because the U.S. Federal Reserve raised the fed funds rate to 9% to combat stagflation. The historical fed funds rate reveals the ups and downs since 1971.
The record low for the Us dollar was 71.58 on April 22, 2008. This was shortly after the Bear Stearns bank failure. At that time, investors fled to the euro because they thought the financial crisis was limited to the United States.

A strong US dollar can also mean that the US dollar rate increased over a short period. The US dollar strengthened by 25% between July 2014 and March 2015.
Why the US Dollar Is So Strong Right Now
The US dollar is so strong for three reasons. First, the Fed ended its expansive monetary policy as the economy improved. It stopped adding to the money supply. This constrained the supply of the US dollar and increased its value.
The Fed also raised interest rates in December 2015. This strengthened the value of the US dollar. It meant that U.S. Treasury notes would attract higher interest rates in the short-term. That increased the demand for US dollars. Savers earned a higher rate of return on dollar deposits than on euro deposits, which paid lower interest rates.
Second, the European Central Bank lowered the value of the euro by doing the opposite. Political instability in the European Union also weakened the euro. The euro to US dollar conversion and its history shows how the euro has fared against the US dollar through the years.

The US dollar automatically strengthens when the euro weakens. That’s because the euro makes up 57.6% of the value of the US dollar index. This means that whatever makes the euro weaker will make the US dollar stronger and vice-versa. Each of the other currencies in the USDX has less influence on the US dollar’s value.
Finally, forex traders intensified the strength of the US dollar. They used leverage to further weaken the euro and strengthen the US dollar.

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