Key Concepts: The Foreign Exchange Market, The Balance of Payments,

INO Exchanges (Global Foreign Exchange)

Click on the "Foreign Exchange" category in the left column navigation bar. Then, click on the EURUSD (Euro and U.S. Dollar) link. Under the graph, select either the 1-month or 6-month chart range option to feature the past EURUSD (Euro and U.S. dollar) exchange rate movements. Note that the Euro exchange rates are expressed in "US$ per Currency" terms.

• Calculate how much the U.S. dollar has appreciated or depreciated against the Euro over the last 6 months.
• Explain why a strengthening U.S. dollar might be good news for U.S. importers.
• Explain why U.S. automotive manufacturers are concerned about a potential weakening of the Japanese yen. How would this affect the U.S. "balance of trade"?