If demand for the U.S. dollars , Fed buys dollars to raise the exchange rate.
A currency's exchange rate, or "exchange rate," in finance refers to the price at which it will be exchanged for another currency. The most frequent type of currency is a national currency, though they can also be supra-national, like the euro, or sub-national, like Hong Kong. The regime of exchange rates that will be used for each nation's currency is chosen. Exchange rate restrictions and limitations are subject to government action. In addition, a nation's currency may be strong or weak. Regarding the ideal national exchange rate, the economic literature is divided. Exchange rates are set under regimes with floating exchange rates on the foreign exchange market, which is continuously active and available to a variety of different types of buyers and sellers: 24/7, excluding weekends.
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