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Please Explain: Currency Valuation

Friday, September 28, 2007

Anyone who has traveled outside the United States knows that the value of a dollar all depends on where you are. On today's Please Explain, Professor Mark Duckenfield of the London School of Economics and Associate Editor for Barron's Mike Santoli are here to answer your questions about how currencies are valued, how exchange rates are set, how currencies are traded, how relative values affect international trade, and how recent trends in currency values can affect your wallet.

Call us at 212-433-WNYC or post your questions and comments here.

Weigh in: How has the weak dollar affected you?

Guests:

Mark Duckenfield and Mike Santoli
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Comments [6]

Anthony from LaGrangeville New York

Currencies around the world are stronger against our dollar. We continue to print money without backing. More money without backing, less value.

Sep. 29 2007 08:55 AM
JB from Manhattan

Big Thanks to WNYC for having these guests on to talk about currencies... interesting stuff. Leonard, you should do a follow up each quarter!

Re: Laura

War is one factor in the current value of the dollar versus other world currencies, but realize that literally trillions of dollars are trading each day, most by speculators; so this is a factor, but only to a degree. The war might effect the dollar in several ways (and has in history); for example, anything that causes oil prices to rise drastically will typically cause the dollar to fall because we depend so much on oil. On the other hand though, a large war might also boost the dollar if it creates a demand for lots of weapons and such that American corporations create. So my opinion is that there are too many intricate factors involved to directly correlate a major lack of convidence in the dollar due to the war.

Keep in mind too, though, that each economist will give you a slightly different opinion!

Sep. 28 2007 04:20 PM
Jorge from New York

If the trade deficit is a critical factor in determining the value of the dollar, how does it relate to the fact that when the dollar is weaker, American made products are cheaper to the world, therefore increasing exports and changing the dynamics of the trading deficit.

Sep. 28 2007 01:25 PM
Laura from brooklyn

how much does the war influence the devaluation of the dollar? isn't this yet another way that people are showing their loss of confidence in the US?

Sep. 28 2007 01:24 PM
Queens Listener from Queens

How and why did the Canadian dollar catch up with the American dollar? Aren't the economies of both countries linked closely?

Sep. 28 2007 01:21 PM
roehan

The lower value of the dollar may be better for exporters but low waged Americans will be the ones hurt the most.

Sep. 28 2007 11:51 AM

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