US Dollar Exchange Rate

The US Dollar Exchange Rate has suffered a depreciation of nearly 20 percent since early 2002, when the value of the US Dollar began reducing in comparison with the major national currencies of the world. The reduction in the comparative worth of the US Dollar has enhanced exports from the U.S.

The US Dollar Exchange Rate has however, remained more or less stable in comparison with the major trading partners of the U.S. such as Canada, U.K., Germany and the other European nations besides Japan. This has resulted in a paradoxical situation for the US Dollar Exchange Rate because in spite of the US Dollar Exchange Rate experiencing considerable depreciation enhancing the national exports, the gains from the increased exports has however remained almost the same.

At the same time, the increased exports made to the developing countries, mainly the exports to China, India, and Brazil have not been able to return higher profits which were expected due to the depreciation of the US Dollar Exchange Rate. The faulty international trade policies adopted by the U.S. companies conducting trade across the world, in addition to the flawed market conditions which is a characteristic feature of developing nations have cut down on the expected returns from international trade.

The US Dollar Exchange Rate actually denotes the balance between the demand and the supply for the US Dollar (the official currency of the U.S.) across the world. This balance is in turn influenced by the overall strength of the U.S. economy as well as the interest rates being offered in the financial markets of the U.S.

The economic condition (rather, economic strength) of a nation is determined taking into account the following factors :

• GDP or Gross Domestic Product of a nation
• Foreign investments into the country
• The balance between imports and exports or trade balance.

As a result of the factors stated above, the US Dollar Exchange Rate is never stable through the day.

The US Dollar Exchange Rate per unit US Dollar (as per the latest reports of August, 2007) against the major currencies of the world is close to the following exchange rates given below :

• Canadian Dollar 1.065706
• Euro 0.729556
• Pound Sterling 0.499424
• Swiss Franc 1.205705
• Swedish Krona 6.705046
• Japanese Yen 118.950249