Unit 7 Foreign Exchange Market

Foreign Exchange Market: Its the buying and selling of currency.

• Appreciation: The value of currency is strong, the dollar buys more of another country which results in less expensive imports and ore expensive exports.
• Imports increase because of cheaper money creates trade deficit.
• Depreciation: Weak dollar, buys less of a currency, results in a more expensive imports and less expensive exports. Creates a trade surplus and trade exports.