Take the US dollar for example. I was reading an article which said the dollar reached new highs recently, but there was a negative connotation to the piece. Doesn’t something “rising” generally mean it’s “stronger”? I usually think in terms of assets like stocks
In: 76
When other countries buy more goods and services(using the US dollar), they need to convert their home currency to the US Dollar.
Like for any other good, a rise in demand with supply remaining same, causes the price to buy US dollar using the home country currency to rise.
It’s different for each currency pair, and so their is the Dollar Index that tries to give an average to show the general trend of if the US dollar price(exchange rate) to buy using other currencies is mostly rising or falling. It is this index that was mostly rising in the recent time period, and described as dollar becoming stronger.
Latest Answers