What makes the dollar stronger than the euro....or vice versa?

Question

What makes the dollar stronger than the euro....or vice versa?

Answer 1

Consumer perception as to which is more valuable, combined with the present circulation of the money. Also the expected future value of the currency.

Sadly, we have no idea what the present circulation of the US Dollar is, as the Federal Reserve (a private for-profit entity that is not a US government organization) has refused to release the M3 money supply for the last several years.

If they have doubled or tripled the value of the dollar, that would explain why the dollar has drastically fallen to the point of near worthlessness in regards to its value against some other currencies.

Answer 2

It is based gold's sale rate, the backbone of all kinds of money.

Answer 3

I've been scratching my head over the same question too! After all, money is, literally, pieces of paper to which we give value. I guess it has to do with PERCEPTION. For example, if I'm stranded on some god forsaken island with no food but with all the money in the world I'd soon stave to death a very rich man!

Answer 4

The Euro is stronger than the dollar. It's based on economics, isn't it? On productivity and the like...

I also think it has to do with how much money is in print. The more in print, the less valuable it becomes.

Answer 5

supply and demand

Answer 6

Livonian Order is quite correct.

19ar, you are referring to the now defunct Gold Standard.  Only Switzerland officially holds to any form of Gold Standard for currency now.  Western nations de-monetised gold and silver over the past 100 years.  In the US it started with the Federal Reserve Act of 1913/14.  In Australia it started with the removal from bank-notes or the promise to allow the bearer to redeem the note for a quantity of precious metal in 1930 or so.  Britain did a similar thing.

The dollar has never been stronger than the Euro, though it has had times of relative strength against it.  The USD is weakened by a number of factors, including the sheer number of banknotes that are in circulation, and a perception that the US economy lacks strength in comparison with Europe.  United, Europe represents the biggest economic entity in the world.  Some countries and corporations have also switched to Euros as their reserve currencey and preferred means of exchange either for political or economic reasons (or both).  The status of the USD as the world reserve currency was never carved in stone.