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# Dollar versus the Euro

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Â· On Friday, the New York foreign currency market closed with a quote of \$1.0900 / Euro. To stimulate economic activity the Federal Reserve hints that interest rates will be lowered by 50 basis points (Â½ of 1%). At the close of business on Monday, reacting to speculation that the Fed will lower interest rates, the New York currency market closed with a quote of 1.1250 \$ / Euro. Has the US dollar (\$) appreciated or depreciated against the Euro? How can you explain your answer?

Â· Given the following exchange rates: \$US 1.6022 / Â£ and Â¥ 121.95 / \$US, how many Japanese yen (Â¥) are needed to purchase 1 pound sterling (Â£)?

Â· For each of the following direct foreign exchange quotes calculate the equivalent
Indirect quote (round off your answer using four decimal places):

Ã¢?Â¬ 0.00776 / Yen

\$0.2723 / Dirham

\$0.0212 / Rupee

\$1.6037 / British Pound

Ã¢?Â¬ 1.4614 / British Pound

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https://brainmass.com/economics/exchange-rates/dollar-versus-the-euro-18679

#### Solution Preview

Â· On Friday, the New York foreign currency market closed with a quote of \$1.0900 / Euro. To stimulate economic activity the Federal Reserve hints that interest rates will be lowered by 50 basis points (Â½ of 1%). At the close of business on Monday, reacting to speculation that the Fed will lower interest rates, the New York currency market closed with a quote of 1.1250 \$ / Euro. Has the US ...

#### Solution Summary

as the US dollar (\$) appreciated or depreciated against the Euro? How can you explain your answer?

\$2.49