What is causing the weak dollar?

Question

The U.S. dollar is still weak despite falling oil prices, a strong U.S. economy and low unemployment rate. The greenback has been holding fairly steady but still can't pull out of its funk against the Euro, Pound Sterling and Canadian dollar. Does it have to do solely with our massive trade deficit? This is obviously one factor but surely those other things should be working in the dollar's favor. I thought the best place to get this answer would be in (what George W. Bush once called) the "dark dungeons of the internet". =)

Answer 1

Total credit market debt in the United States (all sectors) is...

$42,666,000,000,000 (forty-two trillion, six hundred sixty-six billion dollars)

...which is over 300% of GDP.

That and the trade deficit is why the dollar is weak.

Answer 2

I believe the trade deficit and the enormous foreign debt of the U.S. to be the primary causes.

This quote from Wikipedia underlines my point:
"Since the early 1980s, the United States has transformed from being the world's largest creditor to having a substantial current account deficit and a national debt, which is now approximately 64% of the GDP and the highest since the 1950s."

Perhaps few Europeans wish to trade U.S. dollars with the potential general downturn of the U.S. economy:

"Some fear high government spending (such as in the Iraq War) as well as high oil prices may accelerate inflation. There are also warnings that the Federal Government needs to re-balance the budget to avoid potential default. While default does not appear a probable outcome, it is highly likely that persistent high budget deficits will drag down the economy in the future. This applies even more so to the current account deficit and external debt. U.S. liabilities to foreigners are estimated at $15 trillion in 2005, and continue to grow."

Answer 3

no longer precisely the susceptible greenback forces international places to chosen between - increasing the present account deficit and decrease inner financial activity, as long as weaker greenback makes the tradable products of international places world extensive greater high priced - greater inflation, by using fact international places which desires to stabilize its replace fee, ought to positioned extra money contained available in the marketplace and extra money without greater production potential greater inflation

Answer 4

George W. Bush. The only good thing that guy has done for me is increase my interest in currency exchange. I've learned a great deal about trading my Canadian gambling money for US gambling money for a profit. Thanks for screwing everything up, George!

Answer 5

I think they switched to a cheaper brand of paper or something , I noticed it too. I grabbed one from my pocket the other day and it damned near ripped clean in half ..........

Answer 6

Even money has competition. Our dollar is no exception.

Answer 7

Sometimes is not that we are doing bad, as you said we are doing good. It's just that they are doing better.