subject: Learn more About the US Dollar Exchange Rate [print this page] The US dollar exchange rate which you might see on any of the exchange rate charts will tell how well the dollar has performed vis-a-vis some other currency whether it is the pound or the Euro. Forex trades are normally made in twos, as one currency of one country against another currency of another country. Whether you are trying to convert the Pound to Euro or the Japanese Yen to US dollar or any of the other currencies from one to the other, you can now do so online at the touch of a few buttons and keep up with the currency news as well.
In the Forex market, the financial currency that is most traded is the US dollar. Most of the traders use the US dollar as one of the two currencies used. And the two that are traded most often are the Euro against the US dollar although the Pound to Euro is not uncommon. When investors normally enter this kind of trade, they are hoping that the relationship between the US dollar and the Euro will go the way that they forecast it to. If the trade is long, then they are anticipating the Euro to go up in value and if the trade is short, then they are expecting the exact opposite.
At the peak of the World War in the July of 1944, the 44 Allied nations had 730 of their representatives meet in New Hampshire at a hotel for the United Nations Monetary and Financial Conference. Since Japan and Germany were not part of the Allied nations they ere not present. It was at this time that the International Monetary Fund or IMF came into existence and the Bretton Woods System was implemented. If you look at the US dollar exchange rate history chart starting form then you can see that the dollar was the strongest currency in the world. The system was meant to form a set of rules for monetary policy the world over and for relating between the various currencies whether it was Pound to Euro or any other. The rules here forced the countries involved to adopt monetary and financial policies that would keep the exchange rates of each of their currencies within a particular series as they related to the existing value of gold.
But in 1971, the U.S. canceled the conversion of the US dollar in terms of gold and started to print as much money as it wished to. A lot of people look at this as one of the causes that led to the financial meltdown witnessed in 2007 the world over. Currencies today are said to float and their values with respect to one another whether it is Pound to Euro or US dollar to Yen, change all the time. Bad economic news in a country many a time results in the value of the currency falling down. Good economics will have the exact reverse effect.
