The depreciation in the value of the Dollar has given rise to the trade deficit all across the globe; this is because the Dollar is the most widely used currency in exchange. When compared with the Euro, the value of the dollar is similar to its value in the mid 190s. The Economists believe that the value of a dollar when compared with a Euro is highly volatile and it is expected to rise as well as fall at the same time, this goes to show the volatility of the value of the dollar. This paper will throw light upon the value of a dollar, a comprehensive analysis of the value of a dollar will be provided and comparisons with other major currencies will also be made in this paper.
             The dollar greatly depreciated in the year 1971, this was because of the undermining of the Bretton Woods System introduced by Richard Nixon. The same resulted in the collapse of the fixed rate system in early 1973. "But the story doesn't end here. To help insulate the American economy from the inflation ensuing from the dollar's devaluation, Nixon also imposed wage and price controls from 1971 into 1973 -- and leaned heavily on then Fed Chairman Arthur Burns to gun the money supply to make the economy boom and ensure Nixon's overwhelming re-election in 1972. But it soon became clear that the wage and price controls for repressing inflation were untenable and doing great damage to the economy -- so they were abolished by the end of 1973. Unsurprisingly inflation shot up in 1973 and hit almost 12% in 1974." (The Worth of the Dollar, 10 December 2008). Another international rescue operation had to be launched because of the increasing inflation and the uncertain policies of FED. The inflation touched new peaks in 1970s and the value of the dollar fell sharply in the exchange market. In the early 1980s Paul Volcker took over as the new chairman of FED and imposed high interest rates as a result of which the value of the Dollar shot up by more t
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