The Important Monetary and Financial Aspect of International Trade

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America is protected by the service of money. Americans have been fortunate to have the stability of a dollar being the main currency of exchange. Unlike Europeans, who can travel to a next door nation, where the currency is completely different than their own, and their currency are not accepted. We Americans are lucky to be able to travel over the nation’s border to Mexico or Canada and those countries would generously accept our money. By the end of the 21st century, they say, Americans may be shocked to find out that the US dollar possibly will not be the main currency of exchange and might no longer be a desired currency to hold. With the technology and use of credit cards money might become a thing of the past. Foreign exchange in the world’s economy is very important, as in the same way as oil, silver, and gold. The price of money, as a commodity, is determined as a result of government action and international trade. Through the use of national banks, foreign exchanges markets help establish a firm, trading value for a currency. They help businesses conduct international transactions because they provide such businesses a place to trade foreign currencies, where they can learn the value of international currencies in order to properly set business prices. International transactions among nations are important and growing due to the directness of economies all over the world. Different countries have different currencies and each currency has its own value. The value often fluctuates due to a variety of factors. The variance in price is based on the fact that exchange rates imitate local market conditions and calculations of currency traders about overall prospects of an economy. For example, The Levin Institute (2015) stated that when currency traders predict that a nation is going to undergo a bout of inflation in the near future, making their currency

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