Kathryn Dominguez, Marketplace: The dollar’s value, like the value of goods in any marketplace, is affected by how much demand there is for it. And lately, demand has been weakening.
“The main driver is the anticipation that the [Federal Reserve] is likely to cut interest rates in September,” said Kathryn Dominguez, an economics professor at the University of Michigan.
She said investors have been demanding other currencies, since lower interest rates in the U.S. make our bonds — which you need dollars to buy — less attractive.
Plus, investors might be worried about the U.S. economy. “Labor markets in the United States seem to be cooling, and growth prospects are, I think the word is, now ‘normalizing,'” she said.
