Question

Note on decline on US currency...

Answer 1

Answer:

A declining dollar can also mean a fall in the value of U.S. Treasurys. This drives up Treasury yields and interest rates. Treasury note yields are the main driver of mortgage.

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Answer 2

The U.S. dollar declines when the dollar's value is lower compared to other currencies in the foreign exchange market. It means the dollar index falls.

A weaker dollar buys less in foreign goods. This increases the price of imports, contributing to inflation. As the dollar weakens, investors in the benchmark 10-year Treasury and other bonds sell their dollar-denominated holdings.

Oil and other foreign contracts are denominated in dollars. A weaker dollar will drive up their prices because the exporting countries need to maintain their profit margins. The value of the dollar is one of the three factors that determine oil prices.

On the plus side, a weakening dollar helps U.S. exports. Their goods will seem cheaper to foreigners. This boosts the United States’ economic growth, which attracts foreign investors to U.S. stocks. But, if enough investors leave the dollar for other currencies, it could cause a dollar collapse.