Eli5: Why is the U.S. Dollar so powerful?
In: 208
I’ll take a crack at this like you are 5.
When people want something a lot, like something popular, it is worth more. Right now, the dollar is popular. There are many reasons for this. It is reliable and trustworthy, you can buy lots of stuff with it even outside of the US, most oil is bought with dollars, and the US will probably be around I’m 100 years, so will the dollar.
Right now, interest rates are going up in the US, so lots of people want dollars to put in US banks. This makes the dollar worth even more.
OP, you probably aren’t five so it might be easier to say currencies just operate on supply and demand principles and ours has a lot of demand increasing its value.
Latest Answers