Exchange Rates Student Name
The analysis highlights the effect of exchange rate on the price of commodities. The rise in the equilibrium rate of exchange affects countries both in Europe and other continents in the world. The changes in the value of the exchange rate affect the purchasing power parity of a given currency. The appreciation of the Euro against the Dollar has resulted to a stronger purchasing in the Euro zone and hence improved growth in the manufacturing companies in the region. The research puts into view the effect of exchange rate change. The paper analyses a recent article on how the increase appreciation of the Euro against the US dollar has led to an improved growth of industry in the Eurozone. Also, the paper evaluates how the depreciation of the value of the US Dollar affects exports in the Euro zone. Further, the paper indicates how the depreciation and appreciation of currencies result to change in the equilibrium rate of exchange. A graphical representation is made to illustrate the changes. Ultimately, the consequences of the study are highlighted.
The research puts into view the effect of exchange rates. The article, “Global Economy-Manufacturing vigor remains, strong currencies hinder exports” by Cable and Zaharia (2018) addresses the impact of the increased strength in currencies on exports. It highlights how increased strength of the Euro has hinder export of goods to countries such a…
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