Euro Exchange Rate Graph 2010 - The Exchange Rate Of The US Dollar Expresses Its Performance

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Euro Exchange Rate Graph 2010

The exchange rate of the U.S. Dollar, as seen on a US Dollar exchange rate history chart, expresses the dollar's performance relative to the currency with which it has been paired for a specific comparison. How the U.S. Dollar has fared against the British Pound, for example, may not indicate its performance against the Swiss Franc or Japanese Yen.

As the most traded currency in the world, the dollar (U.S.) is a part of every major trade made in FOREX, or the foreign exchange market. Its coupling with the Euro Dollar is, in fact, the most common trade on the board. An investor making this bet is either buying the Euro (EUR) and selling the US Dollar (USD) in a long position or selling the Euro and buying the USD if he is going short.

When 730 delegates from the forty-three nations allied with the U.S. during WWII met in a New Hampshire hotel in July of 1944, history was made. At this meeting of the United Nations Monetary & Financial Conference, several things were accomplished, including formation of the International Monetary System (IMF) and implementation of the Bretton Woods System of monetary policy. Euro Exchange Rate Graph 2010

A glimpse at a US Dollar exchange rate history chart for this time reveals the strength of the dollar as compared to other international currencies. The war, however, was very expensive to wage and things needed to be settled regarding international financial policy. Member nations agreed at this time to implement monetary policies in their respective countries that would ensure the exchange rates of their currencies were kept within certain boundaries and in accordance with the value of gold.

When the U.S. elected to go off the gold standard in 1971 during Richard Nixon's presidency, this changed everything. With the dollar no longer tied to the price of gold, which was a unilateral decision on the part of the United States, this freed them up to print whatever amount of money they chose.

This action consequently caused world currencies to 'float', with their values figured on a new, speculative basis rather than being backed by something tangible like gold. Currency exchange rates now change constantly, often buffeted about by political news and market sentiment. Speculators now rule the financial markets.

All major trades in FOREX include the U. S. Dollar being traded against another major currency. These include The Swiss Franc, the British Pound and the Euro, Canadian and Australian Dollars. If a US Dollar exchange rate history chart is to provide a true representation of actual dollar strength or weakness, it should show the relationship of the USD against all of these other major currencies simultaneously. Euro Exchange Rate Graph 2010

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Euro Exchange Rate Graph 2010 - The Exchange Rate Of The US Dollar Expresses Its Performance

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This article was published on 2010/10/13