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Economics/Currency Question

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Question
Hi,

Right now, the USD is stronger than the Euro but it was really weak a few years ago. Typically, how long does it take for a currency to bounce back up? I know that is a loaded question but can a currency bounce back up after a month or is it typically long duration? thanks

Jackie

Answer
Thank you for your query. This is neither a simple nor an easy question.  It all depends on the situation, the variables at play, the type of currencies involved, the state of the economy of each country.  Could be a month for a short term adjustment or it may take years.  There is no such thing as an across the board or typical length for a currency to get stronger.  You may  want  to read some textbook on international monetary economics which will certainly shed some light on the issue.  Bear in mind that an exchange rate is  just the price of a currency in terms of another. It is a relative price.  You may also take a look at Walras' model.  Good luck.

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