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Topic : Dollar currency loosing its sheen
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Investment Hub

 
Started by : Archana Singh, Relationship Executive, ICICI Bank   10 23 2009 11:29:05 +0000
Industry : Asset ManagementFunctional Area : USA(Markets)
Activity:  24 views;  last activity : 07 06 2010 20:18:09 +0000

The U.S. dollar is the currency most used in international transactions.The US dollar has been adopted by a number of countries as their official currency. so the change in the value of dollar would effect many countries. So What according to you are the critical factors which effect value of U.S Dollar?

pls share your ideas......

 
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1 2 3
1 Strategic Reduction
2 Trade balance
3 Change in administration

Strategic Reduction

idea posted by Mathew Cherian Research Associate/Analyst, Western Michigan University

Paul Krugman in today column in BL acknowledges that US dollar is being devalued as a strategic approach to reduce the trade deficit of US, ie; their import will reduce and exports improve due to devalusation of dollar.

He also states that the Chinese have peged their currency to dollar and is also devaluing their currency so that their exports won't be hit by fall in dollar.

He urges Chinese to be little co-operative so that no game will arise.

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Trade balance

idea posted by Archana Singh Relationship Executive, ICICI Bank

I think the main thing that effect the value of dollar is the trade balance.That is  difference between imports and exports. Recently the US has been running a trade deficit with the rest of the world . And increasing trade deficit is making foreign investors increasingly nervous and can affect the dollar significantly.

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Change in administration

idea posted by Esha Johar Risk Analyst, Irevna

Election also effects the value of the dollar. Some time investors would be having confidence in new administration and some times they would be tensed. This cause investors to attract to or flee from the dollar. And this change the value of the dollar positively or negetively.

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