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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: yard_man who wrote (5744)7/9/2001 2:44:36 PM
From: Ilaine  Read Replies (1) of 74559
 
The Fed can change the relative value of the dollar and another currency by buying and selling that currency - the Fed decreases the value of the dollar by selling dollars in exchange for that country's currency; the Fed increases the relative value of the dollar by buying dollars with that currency. Other countries may assist and cooperate, or not.

If the other countries wanted to keep the dollar strong, they'd have to buy dollars, using their currency. My guess is that we can sell more dollars than most countries can buy.
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