- Read the article “Why the U.S. dollar continues to rise, defying a 2021 consensus trade” by William Watts.
- In a word document or a pdf file, submit the following:
- (20 points) A detailed summary of the article (5-6 sentences ONLY).
- Note: Focus on the exchange rate, the implications, and the causes.
- (50 points) What is happening with the U.S. dollar during the COVID-19 pandemic?
- (10 points) Why was it predicted that the U.S. dollar will depreciate rather than appreciate in 2021? List at least two factors.
- (15 points) For each factor that you listed, apply the three-step recipe and draw the corresponding graphs of the market for U.S. dollars.
- (10 points) Now, determine why the U.S. dollar appreciated instead. List at least two factors.
- (15 points) For each factor that you listed, apply the three-step recipe and draw the corresponding graphs of the market for U.S. dollars.
- (30 points) Now, create your own example!
- (5 points) Pick five countries and crate a table reporting their US Dollar exchange rates for February 2020 and February 2021.
- (10 points) Determine whether the dollar appreciated or depreciated from the year before.
- (15 points) If the dollar appreciated or depreciated, determine what it means for the level of imports and exports of the United States.
