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They are many factors that will affect the USD valuations: -the US economy, -the Fed announcements...

They are many factors that will affect the USD valuations:

-the US economy,

-the Fed announcements of interest rate,

-globalization trade policies,

-speculation of investor sentiment, etc.

Please explain and talk about how those factors affect the USD valuations.

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Answer #1

With increase in US economy the USD valuation increases . This is because demand if US currency will increase.

The Fed when it increases interest rate then the USD gets devalued and when interest rates decreases USD gets appreciated. This is as per interest rate parity.

Globalization of trade policy might affect USD in a positive way as exports will increase with reduction in tariff barriers and trade regulations in the global world.

Investor speculation also factors in the USD valuations. If investors feel the demand of USD will increase then they will purchase more USD and it will increase the value of USD. and if they sell USD in the market the the maket value of USD might fall.

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