Credit Card Review Blog

The Current Value of the Dollar

The Current Value of the Dollar

It isn’t “news” to anyone around the world that the United States is in a serious financial panic. America’s financial crisis is also affecting other world markets. The Japanese economy has started to spiral downward. Europe’s situation isn’t much better. But, not many people realize the strength of the U.S. dollar right now.

For the majority of 2008, investors have accumulated massive debt to acquire more assets. Confidence in the stock market caused the collapse of Lehman Brothers and Washington Mutual. The short term credit market is completely locked up, which makes it extremely difficult to be approved for any type of loan right now.

The good news is that things could be a lot worse. Yes, this is the largest and most severe financial crisis since the Great Depression. However, things have to get much worse before this crisis can be compared to the Great Depression.

As more and more companies took on riskier loans, the value of the dollar was weakened. As these companies have steered away from risky loans, the value of the dollar has been strengthened. The reason the dollar’s value hasn’t been completely shattered is because the United States isn’t the only economy in trouble. The International Monetary Fund issued a serious warning recently. It predicted that Europe, the UK and Japan’s economic output will not be substantial next year. In fact, Japan has been struggling to come out of its financial slump, which has already lasted almost two decades.

In the past three months, the value of the dollar has increase by 15 percent compared to the euro. It has risen eight percent in less than a month. The dollar’s value has decreased slightly compared to the yen though. But, it has retained its value against Japanese currency. It is also doing better than any other major currency when compared against gold.

Economists are now watching the value of the dollar and the state of the economy. Some economists predict that things will start to get better. Other economists think that the value of the dollar will continue to rise until it experiences a monumental drop. For now, the value of the dollar remains strong, despite severe economic troubles.