The Price Of The US Dollar

The price of the US dollar is currently, as of September 2007, at an all time low. Its strength against the British pound and the Euro is extremely poor to say the least. In consistently falling against the world's major currencies, the US dollar is certainly proving to be a useful for forex traders all over the world! The foreign exchange market is certainly unstable as a result of the declining American economy, but the question has to be whether or not this will continue into the future and, indeed, for how long?

The US dollar's record low has left some forex traders sweating, but others rubbing their hands together, just waiting for the dollar to break, especially those that had invested in gold. Those individuals that had invested heavily in the dollar via forex trading trading stand to make a lot of money, and a significant return on their investment, and recent activity has indicated that it may well pick up in the near future.

The US dollar is recognized as the reserve currency of the world and that is considered relatively safe, although its recent instability has caused a loss of public confidence in the marketplace. That is not to say that the price of the US dollar has put hardened forex traders off. In fact, it has had quite the opposite effect in a handful of cases, with individuals investing heavily in order to make money when the price increases.

Ultimately, investment in the US dollar depends on how far individual investors believe that they are taking a risk by financing the currency itself. In terms of economic value, over a quarter of all economic activity is carried out by Americans, thus giving the dollar some credibility, even if that is not reflected in the foreign exchange markets at the moment. Although the housing market in the United States is considered weak, this is somewhat superseded by the previous fact. The housing markets abroad, especially in the UK, while strong, are beginning to level off in terms of value, so it is not inconceivable that the US market will catch up a few years down the line.

Forex currency trading does represent significant investment in the dollar and the level of trading is not at a low just yet. However, it remains to be seen how long it can retain a measure of confidence before the price of the dollar hits yet another low.

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