The Pros And Cons Of The US Dollar

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Over the years the US dollar has proved to be one the more superior currency in the world. The US dollar will always be as strong as it because it is high in demand. Especially when we are trading with other developed economies such as Japan or Europe. So with the relatively good economy, it has helped boost up the US financial markets, it has made the us more attractive to foreign capital. Even though the US dollar has proven its worth some doubt its strength. Some claim the dollar constantly loses its value while others protest that there has been no deflating and that if the US dollar continues at this rate it would become its strongest yet.
Strong and weak dollars are terms generally used to describe the relative value of the U.S. dollar
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Meaning the US dollar would have decreased in value to other currencies, making it to where the US dollar would be buying less of the other currencies. For example, which was simple stated by Investing Answer, “if you needed $100 to buy a gold coin yesterday, but today you need $110, the weakening dollar is causing you to pay more for the same amount of gold”. The dollar value is always fluctuating, so naturally when the dollar value rises our products would become more expensive overseas. So when it decreases you would see things like the price of gasoline, imported products, and employees’ wages …show more content…
For those who might not understand a “pegged” dollar is when a country keeps their currencies value as the same exchange rate to the US. Meaning the the currency would rise and fall as the dollar does. Why peg? Well with a peg, an investor will always know what their investment 's value is and with that they will not have to worry about those daily fluctuations. A pegged currency can also help to lower inflation rates and generate demand, which results in better stability for the currency. There are exactly 66 countries that either peg their currency to the US dollar or use the dollar as their own legal tender. Another name for pegged would be a fixed rate. That is where the central bank would set and maintain an official exchange rate in return for the US dollar. So in order for the bank to maintain that exchange rate they would buy and sell their own currency on the foreign exchange market in return for “pegged” currency. China uses fixed exchange rates as opposed to pegging their currency 's value to a dollar range instead of a specific number because it keeps their currency low and makes their exports more competitive in regards to

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