Ever since the first time I went abroad, I've watched the currency tables in the newspaper. I've seen the pound at $1.80 and the euro at $1.20. Now, the pound is at $2, which is unfortunate for me, since I will be studying in the UK next semester. Even the Canadian dollar is just about on par with the American. I don't know much about economics, so I'd like to open discussion regarding why the exchange rate for the dollar is so poor and what, if anything, we can do as consumers to combat this.
Correct me if I'm wrong, but it's my understanding that the dollar is falling partially due to our trade deficit--we are importing more than we are exporting--and partially due to our debt. It seems to me that it would be beneficial for the economy if U. S. companies produced more goods on U. S. soil and we were a bit more insular when it came to using domestic goods.
Apparently international faith in the dollar has fallen, and I'm not going to speculate about the reasons for that, so it's being traded for other currencies with the expectation that it will continue to drop in value. So what do you think? Why is this happening? Can we do anything about it?
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