Question

Please pick a foreign currency you like and provide the movement of the exchange rate between U.S. dollars and foreign currency in the past few weeks. Please provide data, statistics, or figures associated with your answers to the following questions.

1. Did U.S. dollars appreciate or depreciate against the foreign currency over the period?
2. We have learned which factors can affect the exchange rate, such as income level, inflation rate, interest rate, the expectation of future economics, government policies. Could you please explain the phenomena you have observed about U.S. dollars in question 1? Which factors matter for the movement in U.S. dollars?

Answer 1

I will be selecting Indian rupees against United States dollars and the movement of United States dollars has been a strong against Indian rupees as $1 has almost risen from 72 rupees to 75 rupees, so Indian rupees has substantially depreciated against American Dollars in past few weeks.

United States dollars has appreciated against Indian rupees in past few weeks.

The expectation of future economic and government policies are related to movement of United States dollars against Indian rupees as there has been a talks of stimulus in the American economy which has made the American dollars strong against other currencies because it is relatively gaining strength and Indian economy has a risk related to poor growth in upcoming quarters and it is also not showing signs of recovery from coronavirus and hence the Indian rupees has substantially depreciated against American Dollars.