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Can you explain that further please?

a very nice answer, but that was mostly explaining why Saudi sells oil in dollars. My question was why oil based economies like Saudi need to PEG to the dollar.

so what are the benefits from pegging exactly?

Why must oil exporting nations peg their currency to the dollar? What are the reasons they have to do this?

Thank you.

"China buys US Treasuries with her trade surplus dollars." What I don't understand is, Chinese exporters are the ones receiving the dollars, not the Chinese government or Chinese central bank. So arent the surplus dollars going to the hands of the Chinese private owners of the export...

Why does inflation increase in a fast-growing economy?

Why does this happen?

How and why does a trade deficit cause the currency to lose value?

So how can I, in a foreign country, take advantage of this? What are the different ways of investing ?

What causes the currency to rise exactly?

"currencies are influenced by a broad set of factors, including central bank policy, interest rates, current account balances and other macroeconomic indicators." How exactly does each affect prices? What happens step by step?

But who exactly will buy it?

But since their currency isnt a major one, why would anyone buy it. Take Qatar for example, who would buy it in the world market when the gov't tries to sell it?

How are pegs to the dollar maintained exactly by governments? For example, does the country buy / sell its own currency in the forex market?

How does a decrease in interest rates decrease a currency's value exactly? What does the gov't do exactly?

When a government raises interest rates, and the money supply in the country increases, does this affect the currency price? Or to affect the supply/demand of the currency price it has to buy/sell it internationally?

I thought it was about supply/demand? Doesnt the Bahraini Central Bank buy/sell Bahraini Dinars to maintain the peg?

"The Interest Rates in Japan are being kept low, serving to keep the value of the Yen low. In general when interest rates are low, the value of the currency is low. When more money is printed it also reduces the value of the currency. Lastly there has been a period of zero inflation in Japan...

I know but I mean why doesnt it stay at .37600, why does it fluctuate