The Dollar Exchange Rate

Paper Summary:

This paper begins by examining the evolution of the US Dollar/Japanese Yen exchange rate from the 1st of January 2003 to the 1st of January 2005. The paper examines this exchange rate from a bilateral trade and foreign investment perspective and then goes on to take a look at the Indian Rupee-US Dollar exchange rate as well as the Mexican Peso-U.S. Dollar exchange rate from the same perspective.

From the Paper:

"If we look closer on the graph, we will see brief periods of appreciation for the US dollar in March and June 2004. These may correspond to the periods when the Federal Reserve decided to raise interest rates in the US in order to fight rising inflation. Indeed, in order to encourage economic growth, the level of interest rates in the US had reached some of the lowest levels in history, 1 %, before gradually rising (they presently stand at 3 %). Each 0.25 % increase in the interest rate boosted confidence in the US dollar."

More papers on The Dollar Exchange Rate:

• Essay # 87406 : "Exchange Rate Theories "
• Essay # 67876 : "U.S. Trade Balance and Exchange Rate"
• Analytical Essay # 149136 : "The Exchange Rate: US and the Canadian Dollars"

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