before, the dollar exchange was $1 = 55.00 pesos but now it has become $1 = 49.00 pesos why is that happening? is there any chance that it will go back to 55 ? pls do help..
2006-12-12 14:57:00 · 4 answers · asked by Annie Ruth 1 in Business & Finance ➔ Other - Business & Finance
The US government is spending $$$ by the truckload to fund the war in Iraq. All this extra money floating around is devaluing the dollar. If the Federal Reserve raises rates they can boost the value of the dollar and get it back where it was, but at a terrible price. Raising rates causes home values to fall. It also causes Adjustable Rate Mortgages to become more expensive. We are already seeing more homes in foreclosure than ever and raising rates would make this even worse.
2006-12-12 15:08:55 · answer #1 · answered by KC 4 · 0⤊ 0⤋
The American dollar is having trouble right now because the American government owes trillions of dollars to governments around the world to pay for the Iraq and Afghanistan wars and the billions upon billions they gave to rich people in tax cuts. A new government who knows how to rule and tax sensibly will turn it around but that may not be for a year or two or maybe a lot longer. Many things can turn it around and many things can make it worse. Hold onto your hat , it is going to be a wild ride.
2006-12-12 15:09:04 · answer #2 · answered by Anonymous · 0⤊ 0⤋
In shortest form, the dollar is receding because China is buying our debt load and we (USA) keep buying on credit, and printing money. to ease oue shortfalls. Future generations will bear the result of this.
2006-12-12 15:03:04 · answer #3 · answered by rvload v 2 · 0⤊ 0⤋
Trade deficit, USA is buying more than exporting.
2006-12-12 14:59:46 · answer #4 · answered by Michael S 1 · 0⤊ 0⤋