A comparison between the value one country’s currency and another country’s currency What is an exchange rate?
How STRONG or WEAK a currency is compared to another currency • Strong – value is higher than another currency • Weak – value is lower than another currency What can it tell us?
Strong gain more of foreign currency when exchanged • Weak gain less of foreign currency when exchanged • Strong $1 = 500 Yen • Weak $1 = .75 Euro What strong and weak mean…
With a strong currency, I can buy more foreign goods and services • Foreign producers are helped • Domestic producers are hurt • Travelers to foreign countries are helped • With a weak currency, I can sell more domestic goods and services • Foreign producers hurt • Domestic producers helped • Travelers to foreign country are hurt What does an exchange rate have to do with trade?
GOOGLE Where can we find information about exchange rates?
1 EURO 1 US Dollar How do I read an Exchange rate table? Amount of Euro per $1 Amount of US Dollar per 1 Euro