US Dollar Exchange Rate

The concept of exchange rate of currencies may be explained as the value of a currency in terms of another currency. Thus when it is said that the exchange rate of a Euro in terms of the US dollar is two it is implied that one Euro is equal to two United States dollars.

The exchange rates of currencies are extremely important in the modern day economic scenario as they help one in assessing the economic stability of a country. If after the calculations, one currency is shown to have a value higher than one with respect to another currency it is assumed to have a lower value than that particular currency. If such results are found to occur more often it is assumed that the currency is not among the stronger currencies of the world.

Nowadays there are a number of online resources that provide people with the latest exchange rate of currencies at just a click of the mouse.

All the users need to do is to decide on the base currency and the target currency. The term base currency means the currency whose value is being determined and the term target currency means the currency against which the value would be determined. The exchange rate of currencies keeps on changing at definite intervals of time and there are several reasons as to why these values change. One of the many reasons is the changes in the market conditions – one example in this case would be the imbalances between the monetary supply and demand.

Exchange rates of currencies have also traditionally played important roles in the context of the economic scenarios of many countries. It has been observed that whenever the currency exchange rate drops too far below the desired level there is an indication of the weakening of the economy and the government is required to take immediate steps to counteract the situation.

If a country suffers from a tradition of having unfavorable currency exchange rates it is taken for granted that they have not had economic stability for a considerable period of time. It has been observed that most countries have experienced this problem of comparing unfavorably with the other currencies of the world. Most of the countries in Asia and Africa, which are considered in the economic circles as the third world, are members of this group.

Some of the prominent currencies, as far as exchange rates are concerned, are the Great Britain Pound, the Euro and the United States. These are the traditional superpowers in this context. In recent times, the Australian dollar and the Japanese Yen have gained prominence. This status of theirs is a testimony to the overall economic prosperity that has been enjoyed by these countries. However, in recent times the exchange rate of the US dollar has fallen in the aftermath of the sub-prime mortgage market crisis.