why is dollar rising?
By anonyalkult •
Why is dollar rising despite American economy faltering and why asian currencies, like indian, falling despite their economies are relatively safe from meltdowns? Especially since now US govt is printing 700 billion dollar more?
currency value in international markets is relative, so if the USD is falling slower than another currency, it is in effect strengthening.
the dollar is getting stronger because demand for the dollar is rising. the absolute safest investment for decades has been US government treasuries, so with markets going crazy more pension funds etc. are most likely looking to buy T bills.
i would also imagine that the 700 billion bailout and the recent announcement that the Feds will buy company IOUs directly is going to be funded by treasury bills, which in part will be sold to foreigners.
people think the US economy is in deep trouble, but even with their long-term unsustainable trade deficits and deficit spending, it still remains the most dynamic economy in the west. it recovered far quicker than Europe with the tech bubble burst, and it will most likely recover quicker this time.
Well in such countries like india, other asian countries which are developing and have chances for better income, foreign investors coming with their money and making investments. Because they can get better income with their money in developing countries. But in case of a crisis in their own countries they are taking their money back from investing in foreign countries. (Not only in developing countries, even in Europa they are taking their money from financial sector) And the currency that they want is USD which is used in their countries. So while they are collecting their money from their investments, it starts to be high demand on USD which makes USD to become valuable in other currencies. Sorry for my bad English, hope I could explain it with my poor English :)
All currencies including dollar is falling but some currencies are falling deeper than dollar that is why you find a rise for dollar.
You really think India is safe ? Dream on, India is part of the World Economy as all other Countries - they are affected already and it will get worse. The US Government has agreed to help out Banks and the Industry, this is why the Dollar is not weakened as much as Euro, other European Currencies and Asian Currencies. When other Countries do the same, the Dollar might be weakened again.
The dollar is falling..but the other currency, like Indian rupee is falling even faster than dollar. So, the difference between dollar and Indian rupee is getting bigger. That is why you see the higher exchange rates. Got it?