Question:

Assume the US has an economic boom, so the US has a higher growth rate that other nations.?

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What will happen to the exchange rate of the US dollar?

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  1. All other things being equal, that would tend to strengthen the dollar, if for no other reason than that a growing economy means more transactions, more goods and services being produced, thus more demand for the dollar.   Additionally there is the likely increase in global demand mentioned above.


  2. will go up a lot since everybody will want to invest into US.

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