Why USD news affecting other currency?

bigdolly

2nd Lieutenant
Messages
1,201
They keep US debt because the government is forced to create it to cover trade deficits which is consequence of the dollar bearing the status of reserve currency. Simple math. Dollar is a victim of its status
 

fxoday

Recruit
Messages
623
Actually, USD now only based on trust since 1971 USD not anymore backed up by gold, the currency still uses in a global world because the US is superpower country, but some researcher say if digital money will replace flat money on the next decade like as Deutsche bank predicts 2030 it will occur where cryptocurrency will replaced flat currency
 

bigdolly

2nd Lieutenant
Messages
1,201
One of the biggest reasons is definitely the US debt instruments held by other nations - it amounts to about $7 trillion.
Yeah, USD determines financial conditions in the world = pace of global credit expansion, I guess this paves the way for equity markets too where the risk priced in is an ease of access to credit sources (i.e. borrowing costs)
 
Messages
102
I found out that even if the currency pair is not related to USD, EUR AUD for example, it is still somehow being affected by USD news. My position was suddenly reached stop loss in a few minutes. Why is that?
USD is major currency all over the world that is why changes in its trend affect on other currencies too. All major currency look like they are interrelated .
 

Bearad

Private, 1st Class
Messages
56
USD news affect other currencies because usd is considered to be the strongest and the most powerful currency in the whole world. Economics of US influence lots of various economics of other countries which cooperate with the US, hence it directly affects their economy. A lot of services and goods are exported from the US every day to other countries, and imported in US as well. Another country (for example France) get these services and goods hence it's the way to increase its domestic eonomy. These are the main reasons why usd news influence other currencies a lot I guess. But, traders should never attach to usd because there are many other currencies which matters a lot.
 

Granigamand

Private, 1st Class
Messages
69
The answer to this question is very simple. Because American economy affects the global market. Basically it is due to post WW2 period when the economies of all the European countries were destroyed because of military combats, the decision was made to make US dollar international currency because of its consistency and stability. US dollar has remained its status until now, so the major part of international trade is implemented using USD as a currecncy.
The situation here is quite easy to understand: US economy affects Us currency which affect all the international trade. That is why if you go the local store of electronics, you may see that the prices there move along the USD price just because of the fact that such devices were imported to your country and the import was paid in USD.
 

bigdolly

2nd Lieutenant
Messages
1,201
The answer to this question is very simple. Because American economy affects the global market. Basically it is due to post WW2 period when the economies of all the European countries were destroyed because of military combats, the decision was made to make US dollar international currency because of its consistency and stability. US dollar has remained its status until now, so the major part of international trade is implemented using USD as a currecncy.
The situation here is quite easy to understand: US economy affects Us currency which affect all the international trade. That is why if you go the local store of electronics, you may see that the prices there move along the USD price just because of the fact that such devices were imported to your country and the import was paid in USD.
Yeah but this link gradually weakens as more and more countries use local currencies in bilateral settlement in order to reduce dependence on USD, in the long-run this doesn't bode well for US economy.
 
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