# Comparing the U.S. Dollar to the Euro

## Comparing the U.S. Dollar to the Euro

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# Comparing the U.S. Dollar to the Euro

INSTRUCTIONS:

There 4 questions, 200 words each in APA format. Course is Financial Institutions

CONTENT:

Financial Institutions Unit VI Name Course Instructor Date If we are comparing the U.S. dollar to the euro, and the euro increased in value from \$1.35 to \$1.45, what happened to the two currencies? Show the appreciation or depreciation rate for each currency. (Show all work/calculations/formulas.) If we are comparing the U.S. dollar to the yen, and the yen decreased in value from \$.99 cents to \$.90 cents, what happened to the two currencies? Show the appreciation or depreciation rate for each currency. An increase in the exchange rates represents depreciation for the domestic currency when using direct quotations, meaning that the foreign currency appreciates as one would need more units of the domestic currency to purchase the foreign currency (Wang, 2009). Equally, an appreciation of the domestic currency implies that one can buy foreign currency using fewer units of domestic currency. When the euro increased in value from \$1.35 to \$1.45, then the euro has appreciated while the U.S. dollar has depreciated Appreciation Appreciation {(P2-P1/P1}*100 Relative to USD, EUR Appreciated = {(P2-P1/P1}*100 =1.45-1.35/ 1.35*100=7.41% Relativ

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