Foreign Exchange Market

Unit 7: Foreign Exchange Market

Foreign Exchange Market

• the buying and selling of currency

Appreciation

• value of currency is strong
• the dollar buys more of another currency which results in less expensive imports and more expensive exports
• imports increase because they're cheaper and creates a trade deficit

Depreciation

• a weak dollar
• the dollar buys less of another currency and results in a more expensive import and less expensive exports
• brings about trade surplus

Graphs

• two graphs:
1. U.S. market
2. other (foreign) market

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