If there is an increase in the desire of foreigners to purchase goods and services from the united states and to invest in u. S. Banks and businesses, then how would this affect the foreign exchange market?.

Respuesta :

To buy local goods they'll have to convert their money into US dollars which will increase the value of US dollar value in the foreign exchange market.

The over-the-counter (OTC) foreign exchange market is where exchange rates for different currencies are decided. Since currencies are always exchanged in pairs, each currency's "value" is based on the value of the other currency in the pair.

In other words, the exchange rate is the price of one currency relative to another. For instance, if the exchange rate between the dollar (USD) and the yen (JPY) is 120 yen for every dollar, then one dollar can be converted into 120 yen in the foreign exchange market.

As there is an increase in the desire of foreigners to purchase goods and services from the united states, they need to have US dollars and this will increase the demand and value of US dollars in the foreign exchange market.

For more questions like the Foreign Exchange market click the link below:

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