Question: the U . S . dollar was trading at 0 . 6 8 0 . 6 8 U . K . poundsU.K . pounds per
the US dollar was trading at
UK poundsU.Kpounds
per dollar on the foreign exchange market.
On June comma OnJune
the US dollar was trading at
UK poundsU.Kpounds
per dollar.
What events could have brought this change in the value of the US dollar?
Did the events you've described change the demand for US dollars, the supply of US dollars, or both demand and supply in the foreign exchange market?
Question content area bottom
Part
The events in the foreign exchange market, everything else remaining the same that could have resulted in this change in the value of the US dollar include
A
a fall in the expected future exchange rate of the US dollarafallintheexpectedfutureexchangerateoftheUSdollar
and an increase in the UK interest rateanincreaseintheUKinterestrate
B
a decrease in the UK interest rateadecreaseintheUKinterestrate
and a rise in the expected future exchange rate of the US dollarariseintheexpectedfutureexchangerateoftheUSdollar
C
a rise in the expected future exchange rate of the US dollarariseintheexpectedfutureexchangerateoftheUSdollar
and an increase in the UK interest rateanincreaseintheUKinterestrate
D
a decrease in the UK interest rateadecreaseintheUKinterestrate
and a fall in the expected future exchange rate of the US dollar
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
