Why has the American dollar increased in value compared to major world currencies?

Economists are not sure what to make of this rise in the almighty buck. The consensus is that the dollar should be losing value rather than gaining. Yet investors are buying the dollar.

I suspect that investors are looking at who will be running the American government after Bush gets de throned. And the polls are pointing quite strongly at Obama being the next president.

Do you believe that investors are bidding the price of the dollar up because they are betting that Obama will be the next president? And with Obama at the helm, the American economy has a better chance of economic recovery than with McCain at the helm.

A stronger dollar isn't necessarily all good for the US. It will make our exports more expensive and therefore make our trade deficit swell. On the other hand, I am about to head to Mexico--there the dollar is at 14 pesos. One month ago it was at 10.

I'm sorry I can't answer your question--but I konw that during the Reagan era, there was a conscious attempt to weaken the dollar to make our products more competitive in the world market.

No . . . with a world wide depression or recession in our midst . . . international investors are running towards the safest bet in town . . . which unbelievably is the U.S. dollar . . . and don't forget the treasury bills . . . sales have skyrocketed.

That's how crappy the financial markets are right now . . . the U.S. is the safest bet.

The dollar is not increasing in value. It is weak against world currencies.

Interesting conclusion...no factual backing, but I respect your opinion.

No. There are other reasons such as the decline in crude oil and the steepening exchange rate gap. Good question though.

I agree it does not sound logical for the dollar to increase, however, there must be a bigger picture that common people don't see yet.

Your attempt to figure out the mystery sounds logical, it is easy to convince peoplee to think this way, however, maybe there is something else..

Maybe the global financial crises has a bigger impact on UK, and UE ?!

Maybe, they are doing this deliberately! Economists says it is an economical manover to loewr your currency rate to be able to compete with other exportations!!

Maybe, UK, EU are doing this as a favour for their ally?!

Maybe it is a trick to buy all can be bought of both UK and EU currences with dollars before it really crashes?!

..

There exists a number of senarios at this point, unless we know the forces behind this, we just have to wait untill time reveals the mystery.. soon I suspect, within a couple of months or so..

The question now, as an investor in the Forex market, what would you buy: dollar or Euro? Which one will get higher within the few next comming months?

For me -- as one of the common -- it sounds as gambling!

Do you thinnk you know the answer for sure?

:-)