Chapter 33 Web Links

Marginal URLs:

• p. 730: Go to http://www.bea.gov/ for the latest U.S. balance of payments data from the Bureau of Economic Analysis.
• p. 733: Go to http://research.stlouisfed.org/fred2/categories/15 for recent data from the Federal Reserve Bank of St. Louis on the exchange value of the U.S. dollar relative to the major currencies of the world.

• See an assessment of the euro's fortunes at one particularly low point during the spring of 2010 at http://online.wsj.com/article/SB10001424052748704691304575254683361456058.html?mod=WSJ_Markets_LeadStory.
• To read a European perspective on the pros and cons associated with the euro becoming a global currency, go to http://centreforeuropeanreform.blogspot.com/2007/11/euro-as-worlds-reserve-currency.html.

Daily Exchange Rates

It is easy to keep up with daily changes in exchange rates by using the Web site of Oanda.com. In this application, you will learn how hard it is to predict exchange rate movements, and you will get some practice thinking about what factors can cause exchange rates to change.

Title: Oanda Currency Converter

Navigation: Go to http://www.oanda.com/currency/converter/ to visit Oanda.com's currency converter home page.

Application: Answer the following questions.

1. Choose a currency from the many available in the drop-down menu. How many dollars does it take to purchase a unit of the currency in the spot foreign exchange market?

2. For the currency you chose in part 1, keep track of its value relative to the dollar over the course of several days. Based on your tabulations, try to predict the value of the currency at the end of the week following your data collections. Use any information you may have, or just do your best without any additional information. How far off did your prediction turn out to be?