The value fluctuates daily, usually by imperceptible levels, but what causes that? Like so many things in economics, financial analysts say it comes down to supply and demand.<\/p>\n
\u201cWhether it’s the dollar against the euro, the dollar against pound, the dollar against the yen, all of our trading partners that moved that dollar decline accelerated after the April 2 tariff announcements,\u201d Colorado financial advisor Bruce Allen told Denver7.<\/p>\n
When people or businesses need U.S. dollars to invest, trade, make contracts \u2014 whatever it may be \u2014 in the U.S., they need U.S. dollars. This creates demand and therefore increases the value of our country’s currency.<\/p>\n
It also helps that for decades ,the U.S. dollar has been the international reserve currency. During global economic uncertainty, investors have historically moved money into U.S. assets as they\u2019ve been seen as stable.<\/p>\n
This is still the case, but financial analysts worry that may not be for much longer. That waning confidence affects how other countries buy and trade our assets.<\/p>\n
It also affects the power and financial privileges our country has been afforded for having that status, such as borrowing money more easily and imposing financial sanctions, according to the Council on Foreign Relations<\/a>. <\/p>\n