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(20.7) Examine the newspapers of recent days. What economic or noneconomic facto

ID: 1131046 • Letter: #

Question

  (20.7) Examine the newspapers of recent days. What economic or noneconomic factors have they used to predict likely exchange rate changes?

10.          (20.8) You are aware of all public macroeconomic information but note that many dealers are buying the dollar even though you think the dollar is overvalued. How would you re- spond? Why do you think order ows appear to predict future exchange rates?

11.         (20.9) What differences are there between national and global nancial markets that can ac- count for Figures 20.18 and 20.19?

Explanation / Answer

20.7 Following are the factors that have been used to predict likely exchange rate changes:

1) Industrial output

2) Demand for imports

3) President Donald Trump's tax reforms

4) Retail sales in the upcoming festive and holidays seasons