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Jr November 16, - pm Greedy gringoes getting theres. Ha ha. Leave a Comment Cancel Reply Save my name, email, and website in this browser for the next time I comment. Interview with Mr. Shaheen H. Al-Ghanem, Chief Executive… September 3, What Is Web 3. Luxury Property Market in Milan September 20, Interview with Ms. Olukayode Pitan, Managing Director and… June 24, The effect of this is that goods priced in U. A weakening dollar implies several consequences, but not all of them are negative.
A weakening dollar means that imports become more expensive, but it also means that exports are more attractive to consumers in other countries outside the U.
Conversely a strengthening dollar is bad for exports, but good for imports. For many years the U. A nation which imports more than it exports would usually favor a strong currency.
However in the wake of the financial crisis, most of the developed nations have pursued policies that favor weaker currencies. A weaker dollar, for example, could allow U.
However there are many of factors, not just economic fundamentals such as GDP or trade deficits, that can lead to a period of U. The term weak dollar is used to describe a sustained period of time, as opposed to two or three days of price fluctuation. Much like the economy, the strength of a country's currency is cyclical, so extended periods of strength and weakness are inevitable.
Such periods may occur for reasons unrelated to domestic affairs. Geopolitical events, weather-related crises, financial strain from overbuilding or even under-population trends can cause pressure on a country's currency in ways that create relative strength or weakness over a period of years or decades.
The Federal Reserve works to equalize such influences as much as it determines to be prudent. The Fed responds with tight or easing monetary policy. During a period of tight monetary policy, when the Federal Reserve is raising interest rates, the U.
When investors earn more money from better yields higher interest payments on the currency , it will attract investment from global sources, which may push the U. Conversely, a weak dollar occurs during a time when the Fed is lowering interest rates as part of an easing monetary policy. In response to the Great Recession , the Fed employed several quantitative easing programs where it purchased large sums of Treasuries and mortgage-backed-securities.
In turn, the bond market rallied, which pushed interest rates in the U. As interest rates fell, the U. Over a period of two years mid to mid the U. However, four years later as the Fed embarked on lifting interest for the first time in eight years, the plight of the dollar turned and it strengthened to make a decade-long high. In December , when the Fed shifted interest rates to 0.
Depending on the type of transaction that a party is participating in, possessing a weak dollar is not necessarily a bad situation. Let's reshape it today. Corning Gorilla Glass TougherTogether. ET India Inc. ET Engage. ET Secure IT. Cryptocurrency By. Stocks Dons of Dalal Street. Live Blog. Stock Reports Plus. Candlestick Screener. Stock Screener. Market Classroom. Stock Watch. Market Calendar. Stock Price Quotes. Markets Data. Market Moguls. Expert Views.
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